February 13 (SeeNews) - Romanian cables and electric conductors manufacturer Romcab [BSE:MCAB] said on Monday it has filed for insolvency in order to come up with a plan for recovery.
"After exhausting other options to weather the difficult times in which we find ourselves, we inform you of our intention to initiate proceedings for judicial reorganization as the solution we have identified for the recovery of Romcab's business in an efficient and effective manner," Romcab said in a statement filed to the Bucharest Stock Exchange, BVB.
The company has filed for insolvency with the court in Mures county, central Romania, with the intention of overhauling its business, it added.
In the last three months, Romcab failed to make agreed payments 79 times - something which had not happened in the previous seven years. The total amount of delayed payment was 18.1 million lei ($4.2 million/4.02 million euro), according to Romanian brokerage house Tradeville.
At the beginning of January, Romcab said it would seek financing of up to 200 million euro ($208.1 million) through a bond issue or a loan.
The bonds will have a term of between minimum 3 years and maximum 10 years, and an annual interest rate of maximum 9.99%, the company said at the time in a filing to the BVB.
In December, Romcab signed a 5 million euro loan deal with Piraeus Bank Romania to finance current operations and investment projects.
Romcab posted a 39.5 million lei profit in the first nine months of 2016, double compared to the profit recorded in the like period of 2015.
Following the announcement of filing for insolvency, Romcab's share price plummeted 14.96% to 3.58 lei in midday trading on the BVB on Monday.
Romcab is majority owned by its founder, businessman Zoltan Prosszer through his company Sadalbari, which holds a 69.03% stake. The remainder is on free float on the BVB.
(1 euro = 4.5019 Romanian lei)
Piraeus Bank Romania SA is among the biggest banks in SEE. You can download our SEE Top 100 ranking
here or subscribe to our free Top 100 newsletter
here