Friday, December 30, 2011

Romanian Hidroelectrica cancels 4 power contracts

Dec 29 (Reuters) - Romanian state-owned utility Hidroelectrica cancelled four contracts under which it sells power below market prices, Economy Minister Ion Ariton said on Thursday, heralding an end for other similar deals.

The contracts - including with a local unit of steelmaker ArcelorMittal - are under investigation by the European Commission and contested in court by minority shareholder Fondul Proprietatea.

The move is part of a wider plan to reform state-owned firms under an aid deal led by the International Monetary Fund. Earlier this month, Hidroelectrica notified 15 companies it plans to cancel bilateral contracts as soon as possible.

"Four of these have been cancelled. At the same time, we have sent documentation to the competitiveness department of the European Commission with a view to identifying a legal solution to cancel all of these contracts," Ariton said in an annual report.

Hidroelectrica's output totalled 19.8 terrawatts last year and accounted for a third of the country's power production.

Ariton also said the government still plans to sell minority stakes in Petrom, Transelectrica, Transgaz , Romgaz, Hidroelectrica and Nuclearelectrica on the Bucharest stock exchange in 2012. (Reporting by Sam Cage; editing by James Jukwey)

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