Bucharest, August 8th, 2017. Constanta County Road and Bridges Operator ended last year in insolvency, yet with a profit exceeding the revenues obtained over the past 10 years. The company registered a profit of Ron 4.6 million in 2016, 36% higher than the cumulated profits obtained between 2012 – 2014, after reporting a loss of Ron 16 million in 2015. 

In 2015, the state-owned company registered a turnover 80% lower than in 2012. In December 2015, the operator requested the court to initiate the insolvency proceedings, after work orders drastically declined, and the company’s accounts were garnished, which led to a blockage of the activity.

In approximately six months since the initiation of the proceedings, under the administration of CITR, which stringently monitored the operator’s activity, the costs were optimized, the establishment plan was adjusted, and the operational plan was reorganized almost entirely, leading to the restructuring of the company. At the end of 2017, with a turnover estimated at Ron 62 million, the estimated profit amounts to Ron 13 million, almost 3 times the profit registered last year.

Bogdan Gorde, Senior Partner CITR: In practical terms, the company has a good performance because its entire activity was streamlined. With half of the amount allocated as compared to 2013, for example, we managed to register a profit twice as big in 2016. With the involvement of the special director of RADJP Constanța, we obtained a net profit, which already proves that the company is stable. We restructured the insolvent operator with less money because we effectively became involved in the company’s activity. 

CITR, along with the Operator’s management, ensured the supply of inputs and raw materials from the providers, reintroduced older, yet functional technical resources in the work flow and facilitated investments of approximately 5 million Ron. Then, it supplemented the work orders from the County Council and Mayoralties and reduced the staff by 17%, based on the minimum establishment plan necessary to continue and streamline the activity. Thus, staff expenses decreased by 20% in 2016 vs. 2015.

The most important steps taken by the insolvency practitioner were focused on cost adjustment and waste reduction. After analyzing the profitability of each unit out of all 11, two of them were eliminated. The procurement plan was reorganized which led to an improved vehicle fleet of the company, after expenses with repairs were also reduced by almost 10% in 2016 vs. the previous year.

Bogdan Gorde, Senior Partner CITR: Due to these measures, RAJDP Constanța is a profitable company, not only in numbers, but also when it comes to the perception of the authorities and of the taxpayers. These results prove that state-owned companies may become profitable, if they operate based on private business models and the stakeholders make all efforts to ensure the profitability of the activity. This means first and foremost that the  insolvency practitioner appointed must be truly committed to identifying unjustified losses, adjusting costs and streamlining the over-sized staffing structures.

The creditors of Constanta County Road and Bridges Operator agreed with the restructuring plan drafted by CITR, which means that by the end of the restructuring period, the company will settle all debts to its creditors, amounting to Ron 61 million.

ABOUT CITR

CITR, leader on the Romanian market of insolvency solutions, has distributed over EUR 200 million to creditors over the past 3 years.

With over 16 years of experience, the company was established in order to restore the health of companies in distress and reintegrate them in the economic cycle, using innovating reorganization mechanisms. 

CITR is closer to customers due to its 9 subsidiaries located across the country and provides customized solutions through 120 experts part of the multidisciplinary case teams, while also supporting struggling entrepreneurs by providing a comprehensive expertise, acquired after managing more than 850 cases in all business areas. Furthermore, it also manages the most comprehensive asset sale platform, sales.citr.ro.

CITR is part of CITR Group, the first group of companies in Romania specialized in customized remedies for companies in economic distress.