Bogdan Tudorache

It is hard to believe that Fondul Proprietatea will sell the Hidroelectrica package, due to the price pressures exerted following the adoption of GEO 114/2018, says Johan Meyer, Fondul Proprietatea (FP) manager.
Asked if he tried to find a buyer for Hidroelectrica’s share package, he replied that he tried and mentioned that under the circumstances of external factors such as GEO 114, which changes the basis for companies to generate their profit, any potential investor would want to have certainties about exact the implications before offering a firm price.

„Hidroelectrica represents 40% of the value of net assets and is the highest position in our portfolio and a return to the regulated electricity market…has the potential to have a significant impact on the company’s financial position. It is only for a period of three years starting in March 2019 and ending in February 2022. For this year, the allocation is relatively low. It still damages the company and will have an impact not only on us as a shareholder, but will have a 4 to 5 times higher impact on the government that has 80% of the company’s shares, in corporate tax and dividends,” said Meyer, quoted by Agerpres.

At the same time, following the OUG 114, due to financial damages to companies, there is also the possibility for the Fund to address the European Court of Justice.

„Thanks to the changes announced late last week, there is the potential for the change in which companies are excluded from the 2% tax to introduce additional discrimination for other energy companies in the market. … It can be regarded as state aid and it is one thing we will study and pursue, as well as the financial losses suffered by companies due to GEO 114, how the methodology has been implemented and we will look very seriously at these financial losses and we will be able to take legal action on the basis of them. The first objective would be to try to prevent the implementation of the ordinance, because of financial damages to companies. We can argue that this is a clear violation of the EU directives. So there is the potential to address the European Court of Justice but until the debates take place and a solution is reached, months or maybe even years in which companies will suffer these consequences,” says Meyer.