BUCHAREST (Romania), September 19 (SeeNews) - Romanian hydro power producer Hidroelectrica said on Tuesday it is investing 23.69 million lei ($6 million/ 5 million euro) in the modernization of its plant in Calimanesti, central Romania.
The work was awarded through a tender opened by S.S.H. Hidroserv Bucharest and will be financed exclusively from Hidroelectrica's development funds. The designated equipment supplier is UCM Resita, Hidroelectrica said in a press release.
"The launch of modernization activites brings a breath of oxygen for both Hidroserv and UCM Resita. These companies have had financial difficulties lately. We are glad that we can work together for the benefit of all the companies involved," Bogdan Badea, president of the management board of Hidroelectrica, said.
Such works have been delayed so far by various external reasons or by the lack of a managerial decision, he added.
"At the time we took over the mandate, about two months ago, the achievement level for development was 20.33%, while the one for refurbishment stood at just 4.50% compared to the forecast in the budget. We are seriously pushing on acceleration to compensate for delays in this area," Badea said.
The modernization of the hydro power plant in Calimanesti is due to be completed within the next 12 months and aims at increasing the degree of automation of the plant. It also aims to increase the safety in operation, the reliability and, most importantly, to prolong the installations' life cycle.
The Calimanesti plant has an installed capacity of 39.6 MW and works with two generating sets with Kaplan turbines. The average annual energy output is 106 GWh.
In mid-September, Hidroelectrica said that its gross profit jumped by an annual 6% to 971.8 million lei in the first seven months of the year. The company posted a turnover of 1.94 billion lei in the seven months through July and a net profit margin of 43%, up 5 percentage points compared to the year-ago period.
A the beginning of Septemeber, Romanian investment fund Fondul Proprietatea [BSE:FP], a shareholder of Hidroelectrica, said that it is reviewing strategic options regarding its stake in the hydro power producer.
The decision is part of the investment fund's ongoing commitment to increase value for shareholders and improve the liquidity of the assets in its portfolio, Fondul Proprietatea said.
Fondul Proprietatea owns 19.94% of the issued share capital of Hidroelectrica, representing 32.01% of the fund’s net asset value as at end-June 2017.
The Romanian government owns 80.06% of Hidroelectrica through the energy ministry.
At the beginning of April, Hidroelectrica exited insolvency, which paved the way for a long-awaited listing on the BVB seen as the biggest in Romania's history.
The initial public offering (IPO) of a 15% stake in Hidroelectrica is expected to raise 1 billion euro ($1.06 million), the court-appointed administrator of the company has said.
The government's plans to dual-list a 15% stake in Hidroelectrica on the Bucharest Stock Exchange, BVB, and on the London Stock Exchange have been repeatedly delayed as insolvency proceedings were taking longer than expected, despite the company's strong financial recovery.
Hidroelectrica operates more than 207 hydro power plants with a combined installed capacity of over 6,432 MW.
Shares of Fondul Proprietatea traded 0.93% lower at 0.8520 lei on the BVB at 1354 CET on Wednesday.
(1 euro=4.5990 lei)