The management of Hidroelectrica, led by Karoli Borbelym, proposes to distribute all the profits received by the company in 2023 to shareholders in the form of dividends. In principle, there will be nothing left for investment. We remind you that Hidroelectrica has a record profit of 6.3 billion lei for 2023, and the government has its eye on this money to cover the huge budget deficit. Hidroelectrica is even more generous than the government asked for.

In addition, the Government recently approved a memorandum requiring at least 90% of the profits of state-owned companies to be distributed to shareholders in the form of dividends. However, Hidroelectrica proposes to transfer all profits to shareholders, not just 90%.

According to the statement, the company attributes the offer to “outstanding financial performance and a significant increase in profitability.”

Declaratively, Energy Minister Sebastien Bourduilla has repeatedly stated that companies’ profits should be used for investment, but this decision is ultimately a political one.

The Ministry of Energy owns 80% of the stock, the rest are listed on the stock exchange.

The proposal, signed by the directors of Hidroelectrica headed by Karolii Borbely, is on the agenda of the April 29 general meeting.

Who is Karoi Borbeli and what is his connection with Marcel Cholaku

Karoli Borbeli, president of the Directorate of Hydroelectricity, is close to Prime Minister Marcel Čolaka through family ties with a businessman from Buzău. More precisely, Karoli Borbeli is married to the daughter of Ionel Gaga, a businessman from Buzău who is close to the prime minister.

According to HotNews.ro sources, his appointment as the President of the Office was largely facilitated by the fact that he is in the close circle of the Prime Minister.

Károly Borbeli was a member of Hidroelectrica’s board from August 2017 to August 2023 and was also president of the company’s strategy and IPO committee. He is also the Director of Public Relations at Orange. He was also the Director of Business Development and Exports at Energobit Group.

He held several positions in the state: Secretary of State in the Ministry of Energy, in the Government of Ponta, Minister of Communications in the Government of Tarichan, Secretary of State in the National Youth Administration, also in the Government of Tarichan.

How big is the budget deficit and what are the profits of state-owned companies sacrificing?

Only in the first two months of this year, the budget deficit increased to 29 billion lei, which is 1.67% of GDP. This is twice as much as in the same period last year.

Under these conditions, the Government asks state-owned companies to contribute to covering budget holes with their profits, distributing at least 90% in the form of dividends. However, under these conditions, there is very little money left for investment from these profits, and in the case of Hidroelectrica, none.

Karoli Borbeli claims that investments can be continued even without money from profits. “The fact that we manage to fully distribute the profits generated in 2023, given that we continue our investment projects and modernization and maintenance programs without difficulty, is a clear proof of Hidroelectrica’s financial stability, as well as extremely good prospects for the future,” – said Karoi Borbely, reports Hidroelectrica.