03 October 2012 13:06 [Source: ICIS news]
BUCHAREST (ICIS)--Romanian state-owned chemical company Oltchim will be privatised via direct negotiation with a major investor, the government announced on Wednesday.
The move is subject to approval from the International Monetary Fund (IMF), with which the country has a financial agreement, but would avoid the public auction route that recently failed.
"Once the privatisation process is re-started, we want to negotiate with a strategic investor, which would also pledge to take over Oltchim’s debt," Prime Minister Victor Ponta said. "The investor would also have to make investments and start negotiations to take over Oltchim’s raw material supplier Arpechim, which is now owned by OMV Petrom.”
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. Direct negotiation would allow the government to screen who takes part in the privatisation process, after businessman and media owner Dan Diaconescu won a bid for a majority stake in Oltchim but failed to pay for the shares.
The government cancelled the privatisation of Oltchim on 1 October, saying Diaconescu had not provided documents to prove he had the money to buy the majority stake he had won. Diaconescu – who offered Romania New Lei 203m ($57.8m) for the state's 54.8% stake in Oltchim in the auction on 21 September – said he had supplied relevant documents but the government was refusing 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 in Oltchim, as part of a commitment to economic restructuring being carried out in consultation with the IMF. The German PCC chemical group 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 3.50)
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