“In the energy [field], loans totaling €700 million have been placed on stand-by. The Turceni and Rovinari energy complexes and [state-owned electricity producer] Hidroelectrica, which are stable companies with no significant debt and with long-term operations, currently have no access to any financing,” sources close to the negotiations told Business Standard.
These companies even agreed to interest rates 1.5-2 percent higher for euro-denominated loans, as they are pressed to make investments to comply with environmental standards, sources added. They said that Turceni was approved for a €300 million EBRD loan, Rovinari was set to borrow €80 million from UniCredit, and Hidroelectrica had four banks on its short list for financing.
“We provide new clarifications and new information to the banks every week. None of these is committing to anything. We are waiting and hoping,” Hidroelectrica General Manager, Traian Oprea, said.
According to the President of UniCredit Tiriac Bank’s Supervisory Board, Dan Pascariu, it is likely that some of the approved loans will no longer be granted, due to the international financial crisis. “International banks have lowered liquidity for local subsidiaries, which is affecting loans, he said.
Pascariu added that, “in times like these, when the amount of financing is declining, syndicated loans are not dead. On the contrary, they will be fewer, approved more rarely, but these will not die, because they allow banks included in the syndicate to have less exposure.”
Raiffeisen Bank’s First Vice President, Marinel Burduja, said the lender is interested in financing operations, but a decision will be made based on market stability. He added that Raiffeisen is interested in the syndicated financing for all three energy companies, and that talks
are being carried out in relation to EBRD. “We are to be told the actual amount, the general conditions and the participants [in the syndicate] in two weeks. All major banks are interested in such syndication. In this case, we are talking about the top four or five large banks on the market,” he said.
According to Burduja, it is unlikely that financing will be granted this year, because such operations are complex.
Sources told Business Standard that negotiations have already been ongoing for more than six months.
The crisis does not only impact on the energy sector. In the IT field, players are now expecting a decline of the market for the first time. In real estate, several projects have been delayed, and transactions are blocked. ING RED, the real estate division of Dutch ING lender, has announced it is not willing to acquire land until next year, when it is set to launch projects in Romania.
‘We provide new clarifications and new information to the banks every week. None of these is committing to anything. We are waiting and hoping Traian Oprea Hidroelectrica General Manager
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