Polish chemicals producer Ciech said on Wednesday its Romanian unit has received a notice of termination of its deal with insolvent local heat and electricity producer CET Govora for the supply of industrial steam.
The reason for termination of the agreement is the inability of CET to deliver process steam on the terms specified, which in Cieh Soda Romania's assessment is related to the accident which occurred in the CET coal mine, Ciech said in a statement filed with the Warsaw Stock Exchange on Monday. The notice period is three months.
At the same time, in its letter, CET Govora has emphasized its willingness to continue cooperation with Cieh Soda Romania and invited it to immediately start talks related to the determination of the new terms and conditions for the supply of process steam that will apply after the notice period.
In April, Ciech Soda Romania signed a 330.6 million zloty ($86.7 million/77.5 million euro) agreement with CET Govora for industrial steam deliveries. Under the contract, CET Govora was to deliver steam to Ciech Soda Romania for 21 months until the end of 2020.
CET Govora, located in Ramnicu Valcea, in southern Romania, has 4 generation units of 50 MW each. It is insolvent since May 2016.
Ciech Soda Romania, formerly known as Uzinele Sodice Govora, is located in the southern county of Valcea, in Govora. The soda factory was the first foreign subsidiary acquired by Ciech in December 2006.
Ciech Soda Romania produces soda ash, water glass, sodium silicate and soda derivatives.
(1 zloty=0.2345 euro)