Romania's Oltchim sliding towards insolvency - PCC

18 August 2011 17:21  [Source: ICIS news]

LONDON (ICIS)--Romania-based chemicals producer Oltchim is slipping dangerously close to insolvency with no solution in sight to deal with its “disastrous financial situation”, minority shareholder, Germany-based PCC, said on Thursday.

Oltchim's management announced last week that the majority state-owned company would temporarily cut 1,025 jobs at its Ramnicu Valcea site until the end of August in order to reduce costs and cut output to 30% of installed capacity this month because it cannot finance its working capital.

PCC is profoundly worried that the Oltchim management lacks any solution for the restructuring and recovery of Oltchim,” PCC, which holds 17.3% of Oltchim, said in a press release.

"[The management's] actions so far have led only to the continuous escalation of financial losses and debts,” it added.

PCC said that if Oltchim's CEO Constantin Roibu stepped down to allow private sector managers to take on the running of the company, “PCC would be ready to help in providing Oltchim with alternative solutions for the raw materials and finance their delivery to Oltchim from PCC's own resources”.

Oltchim deputy CEO Radu Olaru rejected PCC's offer as “frivolous” and claimed that it was PCC which should be “exclusively” blamed for the company's predicament.

“Oltchim's management possesses the solution to get out of this critical situation and to function at capacity with all of our facilities, especially because of the reason that there is solid demand on the global markets for our products,” Olaru said.

“The condition for breaking the deadlock is for PCC to terminate its blocking actions against the company's activity, [namely its] court challenges against the decisions of the general meeting of shareholders and its negative publicity against the company,” he added.

PCC and UK-based investment fund Carlson Ventures International have expressed an interest in acquiring a majority share in Oltchim and implementing a new business strategy should a proposed privatisation of the firm go ahead.

Oltchim’s main products are polyvinyl chloride (PVC), polyols, dioctyl phthalate (DOP) and caustic soda.

By: Will Conroy
+44 20 8652 3214

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