* Country’s top power producer cancelled loss-making deals
* Reported $111 mln gross profit in Jan-May
* Manager files reorganisation plan with court, paper says
BUCHAREST, June 12 (Reuters) - Romania’s biggest power producer, state-owned Hidroelectrica, is likely to exit insolvency on June 26, a year after it was hit by a drought and a string of loss-making contracts, its manager was quoted as saying on Wednesday.
Hidroelectrica was declared insolvent and underwent restructuring largely because of deals under which it sold the bulk of its output for less than market prices, causing losses of $1.4 billion over six years and prompting an investigation by the European Commission.
“I have filed the reorganisation plan in court,” Hidroelectrica’s manager Remus Borza was quoted as saying by newspaper Ziarul Financiar. “If the judge approves the plan, the company exists insolvency on June 26.”
The firm, in which investment fund Fondul Proprietatea has a 20 percent stake, has an installed capacity of 6,400 megawatts and is Romania’s cheapest power producer.
In the last year, it has cancelled the damaging deals and restructured its operations and debts. It reported a gross profit of 380 million lei ($111 million) for the first five months of the year.
The International Monetary Fund, which is leading an aid deal for Romania, has urged successive governments to privatise transport and energy firms, including Hidroelectrica, or appoint new managers to boost efficiency and attract the foreign cash needed to foster economic growth. ($1 = 3.4304 Romanian lei) (Reporting by Luiza Ilie; editing by Tom Pfeiffer)