The national telecommunications operator RomTelecom, managed by the representatives of the Greece-based OTE Company appears to be in serious money trouble. At least this is how general manager Panagiotis Kargados sees it. In an unusual outburst in its serious tone, Kargados pointed out that the only solution to save RomTelecom is a capital increase, following which the Romanian State would relinquish control, without getting anything in return.
The picture the company's Greek manager presents is grim: RomTelecom feels creditors breathing down its neck, while on the other hand service revenues do not increase as quickly as to cover expenses.
RomTelecom's financial problems are serious, indeed, which also shows in the latest audit report recently drawn up by PricewaterhouseCoopers. This report is most worrisome and has made creditors shiver. The operator's problems have also reached the European Bank for Reconstruction and Development (EBRD), one of the most significant creditors of the company.
RomTelecom's debts total $450 million and the company is in dire straits for cash. OTE's version is to increase RomTelecom's capital, with the money to remain within the company. The Communications Ministry, which owns 65% of RomTelecom's shares, but does not manage this company, does not agree with this option, as the State stands to gain nothing out of it.
Were the banks that gave credits to RomTelecom to demand their money back, the company would find itself on the verge of bankruptcy, the company general manager Panagiotis Kargados says.
On top of that, RomTelecom was fined by the Competition Council. Even though the Competition Council has cut the fine down to half in the meantime, RomTelecom would still have to pay $12 million.
"We obviously cannot pay this half now, either. We've gone to court but until we get a court order, the legislation binds us to pay it. The fine is already due. If the Competition Council demands payment right away, which will completely upset our plans, we will find ourselves having trouble paying our employees. The Competition Council may exact payment at any time. It should have been paid already. The point is will there be a forced execution or not. The motion to challenge is pending," Kargados said.
In order to cover its debts to the banks and suppliers and be able to continue investments, the company needs immediate financing worth $450 million, Kargados says. As regards this amount, $250 million should come in form of a capital increase. |
