EC opens investigation into restructuring for Romanian energy producer CE Hunedoara
On 21 April 2015, the Commission approved temporary rescue aid of €37.7 million (RON 167 million) to the Romanian energy producer Complexul Energetic Hunedoara (CE Hunedoara), which has been in financial difficulty since 2013.
In the context of this decision, Romania committed to submit a restructuring plan aimed at ensuring the future viability of CE Hunedoara, if the company were unable to pay back the rescue aid in six months' time.
In addition, in a separate decision dated 20 April 2015, the Commission concluded that CE Hunedoara had to repay around €6 million of incompatible State aid.
EU State aid rules only allow a state intervention for a company in financial difficulty under specific conditions, requiring in particular that the company is subject to a sound restructuring plan to ensure its return to long-term viability, that the company contributes to the cost of its restructuring and that any competition distortions are limited.
At this stage, the Commission has doubts whether the proposed restructuring plan could restore the long-term viability of the company without continued State aid.
First, CE Hunedoara entered into insolvency proceedings in 2016 (currently suspended), with more than €500 million debt owed to various State bodies.
This includes part of the rescue loan Romania granted CE Hunedoara in 2015, a loan financing the repayment of the incompatible State aid but also additional loans of around €73 million, which Romania has granted to CE Hunedoara since 2015 to keep the company afloat.
Second, the restructuring plan does not foresee a discernible contribution of CE Hunedoara to the costs of restructuring nor measures to limit possible distortions of competition as a result of the significant State support.
The Commission will now investigate further to find out whether its initial concerns are confirmed.
At the same time, the Commission will continue to work closely with Romanian authorities to find a viable solution for CE Hunedoara's assets that will ensure they continue to supply electricity, reduce costs for consumers and limit the burden on Romanian taxpayers. ■