05 October 2012 15:46 [Source: ICIS news]
BUCHAREST (ICIS)--The Romanian government plans to begin negotiations with local banks to secure a loan of around €10m ($12.3m) to enable it to resume activity at majority state-owned chemical company Oltchim, Romanian Prime Minister Victor Ponta said on Friday.
“We want to restart activity and to pay salaries to the workers from Oltchim. We will also ask the European Commission to approve getting the loan, and hope to get an answer in the coming 30 days”, Ponta added.
Any plans by the Romanian government to provide state financial support to Oltchim have to be approved by the European Commission.
Production at Oltchim has been severely restricted for more than a year, as a result of a lack of working capital to secure feedstock supplies. Since early September, there have been several demonstrations at Oltchim by company employees protesting unpaid salaries.
The Romanian government announced on Wednesday that it will seek to privatise Oltchim via direct negotiation with a major investor, subject to approval from the International Monetary Fund (IMF), with which the country has a financial agreement. This would avoid the public auction route that recently failed.
Direct negotiation would allow the government to screen who takes part in the privatisation process. Businessman and media owner Dan Diaconescu won a bid for a majority stake in Oltchim but could not afford to pay for the shares, according to the Romanian government.
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.
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.
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
($1 = €0.77)
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