Romania's number one debt collector, the Banking Assets Resolution Agency (AVAB) is focusing on the debt-for-equity swap in the case of eight companies subordinated to the Privatisation Authority (APAPS). The companies in question are to be privatised and their debts total approximately $260 million. AVAB has also decided to use the capital market for debt-collection purposes, this year.
"The Agency's priority list for this year includes selecting one or more brokerage firms to act on the capital market on behalf of AVAB," Ionel Blanculescu, AVAB chairman told Ziarul Financiar.
The receivables in AVAB's portfolio are now worth $3.7bn. "Out of the total amount, $3.14bn account for banking receivables, while $614 million are derived from the loans secured by the Finance Ministry for the companies taken over by the Agency," Blanculescu added.
The AVAB official estimates the institution's revenues to amount to 2,350bn ROL this year, 3.5% more than those anticipated for last year, 1,850bn ROL of which will be derived from the sale of banking assets and 500bn ROL from the sale of the receivables handed over by the Finance Ministry.
"I believe 2003 will be one of the most efficient years in terms of banking debt and state-secured loan collection," Blanculescu specified.
AVAB's portfolio at the moment comprises 23 companies that got foreign loans secured by the State and never repaid them. Out of the total $614 million debt of these companies, only 48.7% account for capital instalments, interests, commissions and other costs, while 51.2% account for unpaid commissions to the risk fund, late charges and penalties for unpaid capital instalments, interests and commissions, as well as late charges and penalties for unpaid risk fund commissions.
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