02 October 2012 17:38 [Source: ICIS news]
BUCHAREST (ICIS)--Shareholders of Oltchim named a new CEO for the company on Tuesday, hours after the government decided to cancel the privatisation of the Romanian chemical producer.
Mihai Balan, former director of Romania-based electricity company Govora, has been selected as the company’s interim CEO. He replaces Constantin Roibu, who on 5 September stepped down along with 16 other directors from the management team.
The news comes at the same time as the government’s announcement that it has chosen turnaround specialist Alvarez & Marsal (A&M) as administrator, with the aim of restarting Oltchim and accelerating the privatisation of the state's majority stake in the company.
A&M is tasked with taking steps to preserve the company’s assets, as well as raising money to pay down debt owed by the company to energy suppliers and the state, according to a press release from the government.
The Romanian government decided late on Monday to cancel the privatisation of Oltchim, saying that the tender winner - businessman and media owner Dan Diaconescu - had not submitted necessary documentation.
Prime Minister Victor Ponta said a new CEO and a new managerial team will be named shortly, and that the company will restart production as soon as possible.
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 in Ramnicu Valcea, southern Romania, Oltchim produces caustic soda, petrochemicals, agrochemicals, inorganic products and building materials, including insulating polyvinyl chloride (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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