Court Of Appeals Rejects Setup Of Romanian Pwr Holding Hidroenergetica

04.17.2011 By Bostan Radu

The Bucharest Court of Appeals has rejected Romanian state-owned hydropower producer Hidroelectrica's request to allow the merger of several power companies into the national power holding Hidroenergetica.

The Bucharest Court of Appeals has rejected Romanian state-owned hydropower producer Hidroelectrica's request to allow the merger of several power companies into the national power holding Hidroenergetica.

The merger plan was first rejected in December 2010, by the Court of Bucharest. Hidroelectrica challenged the ruling, but its requested was rejected by the Court of Appeals on April 14.

In March, the Court of Appeals also barred the setup of the Electra national holding. The Economy Ministry and companies involved in the holding's creation announced at the time they would appeal the ruling.

In April, Alexandru Sandulescu, head of the ministry's energy department, said the ministry had not yet given up the idea of creating two national energy champions and was evaluating alternative solutions to this end. One of the options considered was the creation of one energy complex that would include the power producers in Oltenia area and lignite company SNLO. Another complex would include coal company CNH and the Deva and Paroseni power plants.

Should the creation of the two energy giants fail, the ministry considers primary public offerings for hydropower producer Hidroelectrica and nuclear power plant Nuclearelectrica.

The creation of energy champions Electra and Hidroenergetica was blocked in court by investment fund Fondul Proprietatea (FP.RO), which holds minority stakes in most of the companies targeted for reorganization.

Electra was supposed to incorporate Nuclearelectrica, the thermal plants Turceni, Rovinari and Craiova, parts of Hidroelectrica and SNLO. Hidroenergetica was to be made up of the thermal plants Electrocentrale Deva and Electrocentrale Bucuresti, parts of CNH and the other hydropower assets.