Odsherred Forsyning, burdened by significant debt, has been declared bankrupt following a decision by the Holbæk bankruptcy court. The utility company had filed for bankruptcy itself to finalize an ongoing sale.

Despite this, Odsherred Forsyning was unable to stabilize its finances before a deadline imposed by the bankruptcy court. The subsidiaries of Odsherred Forsyning A/S will continue operations despite the bankruptcy.

The bankruptcy follows a troubled period marked by a problematic district heating rollout and a billion-kroner debt within the district heating division. Last year, Odsherred Forsyning was placed under reconstruction due to a debt exceeding one billion kroner.

A major contributor to Odsherred Forsyning’s substantial debt is the unsuccessful implementation of district heating by its subsidiary, Odsherred Varme. The district heating project, intended to serve five towns, saw its costs escalate from an initial 571 million kroner to 1.6 billion kroner.

Consequently, customers in northwestern Zealand served by Odsherred Forsyning faced substantial price hikes, reaching as high as 76 percent. Customers who wished to opt out of the service were required to pay a “withdrawal compensation.”

The withdrawal compensation was calculated based on the property’s area multiplied by a rate per square meter. For a typical 130-square-meter house, the withdrawal compensation was calculated to be 212,255 kroner.

In July, a reconstruction plan was approved, involving creditors agreeing to write off several hundred million kroner of the company’s debt. Creditors accepted a proposal to reduce the debt from 1.5 billion kroner to 750 million kroner, which the company is obligated to repay over the next 45 years.

Odsherred Varme A/S will continue its operations under strict economic limitations.