Hódmezővásárhely denies the municipality has contractual relationship with E-Star, according to MTI (Hungarian News Agency). The heat service agreement expired in September 2011 due to material breach of agreement. Furthermore, the municipality initiated criminal proceedings because E-Star had not given the natural gas quotas to the municipality and had not stopped servicing. Mr Csaba Soós, CEO of E-Star denies charges and said that E-star’s contracts were always valid for a full gasyear from July to July. Moreover, E-Star does not gain profit on gas trade thus the company is not interested in impeding the municipality on exchange of gas supplier.
This is not clear whether E-Star or the municipality is right, but legal procedures should certainly take long time which is not a good news for EStar. The company faces maturing bonds worth € 4.8m in October while total account receivables amount to some € 5m. Therefore it is crucial for E-Star to be able to collect these overdue receivables in time.