23 January 2013 16:06 [Source: ICIS news]
BUCHAREST (ICIS)--Petrochemical and plastics manufacturer Oltchim is to enter insolvency, in a move intended to pave the way for company’s future privatisation, the Romanian government announced on Wednesday.
“Given the current economic problems Oltchim is facing, we have decided to start insolvency procedures. A request in this regard will be filed to a local court in Ramnicu Valcea. Furthermore, Oltchim’s board is to approve our decision today,” said Romanian Minister for Economy and Commerce Varujan Vosganian during a government meeting.
The Romanian state holds a 54.8% stake in Oltchim, with Germany-based chemical producer PCC holding 18.3% and Cyprus-based Nachbar Services holding an additional 14.3%. Smaller shareholders hold the balance.
The government’s announcement has sparked shock among Oltchim’s employees.
“We are still waiting for more details about government’s decision. Anyway, we will support only decisions aimed to continue activity at the company’s units”, Corneliu Cernev, a company representative, told ICIS.
Oltchim is working now at around 30% of its current capacity. Production at Oltchim has been severely restricted for more than a year due to a lack of working capital to secure feedstock supplies.
The government cancelled the privatisation of Oltchim on 1 October last year, saying that the winning bidder – Romanian television station owner Dan Diaconescu - had not provided documents to prove he had the money to purchase the majority stake.
The government has been pushing forward with a new 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.
Based at Ramnicu Valcea in southern Romania, Oltchim produces caustic soda, petrochemicals, agrochemicals, inorganic products and building materials, including insulating polyvinyl chloride (PVC) for panels, doors and window frames.
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