02 October 2012 09:34 [Source: ICIS news]
BUCHAREST (ICIS)--The Romanian government decided late on Monday to cancel the privatisation of chemical producer Oltchim, saying the tender winner, businessman and media owner Dan Diaconescu, had not submitted necessary documentation.
"The winner did not provide documents to prove he holds the money to buy Oltchim’s majority stake. It is useless to continue negotiations," said economy minister Daniel Chitoiu.
Prime Minister Victor Ponta said that a new CEO and a new managerial team will be named at Oltchim, and the company will restart production as soon as possible.
“Furthermore, a new strategy to privatise the plant will be unveiled this week, and the sale is due to be completed next year,” added Ponta.
Diaconescu – who in a 21 September auction offered Romania New Lei 203m (€45m) for the state's 54.8% stake in Oltchim – has said he supplied relevant documents but the government refused to sell the company to him.
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.
Germany-based PCC owns 18.3% of Oltchim, while Cyprus-based Nachbar Services owns 14.3%. Smaller shareholders hold the balance.
Production at Oltchim has been severely restricted for more than a year, with the company suffering from a lack of working capital to secure feedstock supplies.
(€1 = New Lei 4.52)
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