21 December 2009 12:13 [Source: ICIS news]
PRAGUE (ICIS news)--Romania's Petrom has reached a deal to sell its mothballed Arpechim petrochemical assets to Romanian state-owned company Oltchim for €13m ($18.6m) and a restructuring of debts, the company said on Monday.
The transaction would be completed upon approval from tax and competition authorities, probably early in 2010, it added.
"Petrochemicals was a secondary activity... the transfer of these assets is based on Petrom's management decision to focus on core operations," the company, Romania's biggest oil and gas firm, said in a statement.
It added that the debt restructuring focused on New Lei 112.4m lei ($38.2m, €26.7m) owed by Oltchim to Petrom, which is majority owned by Austria's OMV.
The petrochemical assets include a 200,000 tonne/year steam cracker that is connected to Oltchim by a local pipeline and an 80,000 tonne/year low density polyethylene (LDPE) production line.
Oltchim said that acquiring and revamping the petrochemical division of the Arpechim refinery was a key step in revitalising its fortunes.
The polyvinyl chloride (PVC) producer has largely been operating at around 30% capacity since Petrom closed Arpechim's cracker late last year, thereby cutting Oltchim's main feedstock supply.
In order to launch its revitalisation strategy, Oltchim needs to obtain European Commission approval of state loan guarantees worth €388.4m and a debt-to-equity swap with state privatisation agency AVAS, valued at €135m.
The Commission is investigating whether the package complies with state aid rules.
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