"Romenergo" splits off

The bonds of "Romenergo" which SIF1 Banat-Crişana bought this summer will become part of the patrimony of "Industrial Energy", a company which will be created after the split-up of "Romenergo", which was approved by the shareholders in November.

One of the directors of "Romenergo" is Dragoş Bîlteanu, the chairman of SIF1 Banat-Crişana.

The fact that SIF1 bought bonds of "Romenergo" of 26.95 million lei, at an interest rate of 8% per year and with a four-year maturity, was considered by some people in the market as a controversial, given the positions held by Bîlteanu.

Romenergo has begun the process for the partial split-up of the company, following a decision of the General Shareholder Meeting in the beginning of November, according to the draft published in the Official Gazette.

Some of its assets will remain with "Romenergo", and others will be transferred to two new companies - "Industrial Energy" and "Aris Capital".

Since the majority of the assets will belong to "Industrial Energy", some people think that this will pose a threat to the loan granted by SIF1, since the financial ratios of the new company will look a lot better.

The plan to split-up the company states as follows: "We are taking into account the fact that the existence of certain lines of business within the same company can present a distorted image of the return on assets achieved by the management of Romenergo and exposes the profitability of the company to random factors, outside the activity of its management. It became necessary to find a solution to better exploit the patrimony and the current activity of Romenergo. The wish is to have in the patrimony of Romenergo only those assets that are used for the purpose of the execution of the activities of general entrepreneur for projects of energy infrastructure".

Thus, according to the notes of the Official Gazette, the solution for a better management of the resources of Romenergo, could be the reorganization of the company, through its symmetrical and partial split-up, namely, according to its lines of business.

Thus, the activity of General Contractor will remain with Romenergo, and the other activities delivered by the company which relate to the energy sector (energy production, provision, distribution, and service and export of energy equipments) will be transferred to "Industrial Energy", which will be created following the split-up and which will take over the management, and the rights and obligations deriving from this portfolio of activities. Also, another company called "Aris Capital" will be created through the split-up and its line of business will be "business and management consulting activities".

According to the financial statement at the end of September 30, this year, the assets that remain with Romenergo will amount to 32 million lei, compared to 140 million lei (prior to the split-up), as Industrial Energy will receive 76 million in assets. The total debts of Romenergo prior to the split-up amounted to 84 million lei. After the split-up, Romenergo will be left with almost 28 million lei in debts, while the remaining debts will be distributed to "Industrial Energy" (39 million lei) and Aris Capital (17,6 million lei).