BUCHAREST (Romania), October 25 (SeeNews) - Romanian majority state-owned hydro power producer Hidroelectrica said it intends to close down its Serbian subsidiary Hidroelectrica Trading d.o.o. due to significant losses.
Hidroelectrica will ask its shareholders to approve the liquidation of the subsidiary at their next general meeting, to be held on November 23, the company said in the proposed decision published on its website on Wednesday.
When Hidroelectrica opened its subsidiary in Serbia, it wanted to become an important player on the region's energy market and sell its electricity on a long-term basis in other markets.
"The maintenance of Hidroelectrica Trading d.o.o. in Serbia incurs costs related to operational, accounting, legal and administrative activities, as well as local taxes, without generating income from economic activities," the company says in its proposal.
Hidroelectrica's Serbian unit lost 33,660 euro ($38,409) between 2014 and 2017.
The closing operations will cost the company an estimated 15,230 euro, Hidroelectrica said.
The subsidiary was opened in 2014 and Hidroelectrica aims to liquidate it by May 2019.
On Wednesday, Hidroelectrica said it has signed a memorandum of cooperation with Austrian utility Verbund Hydro Power. The two companies will cooperate in the joint development of projects and the implementation of design, construction and equipment solutions based on the latest technologies in the energy field.
Hidroelectrica's net profit rose by 34% year-on-year to 962 million lei ($240 million/207 million euro) in the first half of 2018.
(1 euro=4.6622 lei)