Fondul Proprietatea – Local SEC prolongs for two weeks the debates on the legislation needed for the secondary listing
Local Securities Commission has extended for two weeks, until January 31, the public debates on a draft legislation which regulates the way Central Depositary operates. The proposed changes will theoretically allow the establishment of a link between the depositaries in Bucharest and Warsaw. If the draft legislation is approved, it means that a major hurdle for the secondary listing of Fondul Proprietatea’s shares has been removed. We rate this piece of news as neutral for Fondul Proprietatea’s shares.
Fondul Proprietatea – New cost cutting measures implemented at Hidroelectrica
According to the local media, the judicial administrator decided to revoke the entire mid and top management team composed of some 57 people. In three months time, their positions should be filled through recruiting processes. Additionally, Hidroelectrica dismissed some 150 people out of the total staff of approx. 5,000, which will not receive any severance pay. Other cost cutting measures were also implemented, including the reduction of the daily allowance for travel, gas tickets and other benefits. These measures should help Hidroelectrica save some EUR 10 mn annually according to the judicial administrator.
Moreover, some 500 employees should be laid off from Hidroserv, the wholly owned subsidiary specialized in construction and maintenance works (from the total personnel of 2,500). The judicial administrator estimates that the company may exit the insolvency procedure on June 26, one year after it entered the procedure.
We view these measures as positive for the power generator as the high salary costs and contracts with Hidroserv at inflated prices were one of the problems putting a pressure on Hidroelectrica’s profitability.
