Romania's Oltchim to begin some restarts Wednesday this week

16 October 2012 15:26  [Source: ICIS news]

BUCHAREST (ICIS)--Oltchim will begin restarting some of its units on Wednesday following a year of restricted production caused by a lack of feedstock, sources at the Romanian petrochemical and plastics manufacturer said on Tuesday.

“[The] company’s new management has decided some of Oltchim’s units to be restarted this week. Furthermore, we want to pay salaries for the workers for the month of September,” said company spokesperson Ion Coclet.

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.

On October 5 the Romanian government announced plans to begin negotiations with local banks to secure a loan of around €10m ($13m) to enable it to resume activity at majority state-owned chemical company Oltchim.

Furthermore, the government 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.

The government cancelled the privatisation of Oltchim on 1 October, saying a Romanian investor 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)

By: Marian Chiriac
+44 20 8652 3214

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