Recapitalization of Romanian companies – EUR 11bn needed, BNR official says

Recapitalization needs for the companies operating in Romania amount to about EUR 11 billion, of which EUR 6 billion for the private companies with foreign capital, EUR 4.5 billion for private companies with Romanian capital and EUR 0.5 billion for state companies, first deputy Governor of the National Bank of Romania (BNR) Florin Georgescu said.

“In real economy, the current recapitalization needs, in order to achieve 50% of the share capital as required by law, amount to EUR 11 billion,” Georgescu said during a conference on accounting.

The BNR official said he is concerned about the financial situation of companies which report financial losses for many years.

Data for 2015 on Romanian companies’ financial results show that out of the 700,000 companies only 608,000 have submitted balance sheets, i.e. 85%. Of these, 14%, or 84,000, have reported to have registered null results.

“Of the 524,000 companies that registered negative or positive results, the ones with profit prevail, 58% or 306,000 companies, which registered a total profit of EUR 17 billion. Of these, the state has only 720 companies with a total profit of EUR 2 billion,” the BNR official said.

In his opinion, it is worrying that 219,000 companies (the remaining 42%) registered losses of EUR 8.5 billion, of which 390 are state-owned companies with EUR 0.9 billion losses, and 218,610 private companies with total losses of EUR 7.6 billion.