Romania businessman buys majority stake in Oltchim

21 September 2012 16:24  [Source: ICIS news]

BUCHAREST (ICIS)--The Romanian state’s 54.8% stake in chemical producer Oltchim was sold on Friday to Romanian businessman and media owner Dan Diaconescu in a deal valued at New Lei 203.15m ($58.4m, €45.0m).

"I want to maintain the company's core activity and to retain Oltchim's workforce, which currently numbers some 3,500. Furthermore, I want to purchase OMV Petrom’s Arpechim refinery, which is a key feedstock supplier to Oltchim,” Diaconescu said after the announcement.

The privatisation contract is to be officially signed on Monday, while the money has to be delivered to the government by the end of next week.

The government was offering its majority stake in one package together with debt worth New Lei 1.79 bn (€398m). Oltchim owes the money to the state privatisation authority, AVAS, and state-owned power producer Electrica.

Three other companies have submitted non-binding offers for the majority stake in Oltchim.  Germany’s PCC, a firm that already owns 18% of Oltchim, offered New Lei 13.4 m, while Romania-based Chimcomplex and AISA Investment offered New Lei 18.8 m and New Lei 30.1 m respectively.

In recent months, the Romanian government has been pushing forward with a privatisation timetable for the disposal of its majority stake, as part of a commitment to economic restructuring being carried out in consultation with the International Monetary Fund (IMF).

Based at Ramnicu Valcea in southern Romania, Oltchim produces caustic soda, petrochemicals, agrochemicals, inorganic products and building materials, including insulating PVC for panels, doors and window frames.

PCC and Cyprus-based Nachbar Services own 18.3% and 14.3% of Oltchim, respectively. Smaller shareholders held the balance.

Production at Oltchim has been severely restricted for over a year, with the company suffering from a lack of working capital to secure feedstock supplies.

($1 =€0.77)
(€1 = New Lei 4.51)

By: Marian Chiriac
+44 20 8652 3214

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