26 February 2013 15:09 [Source: ICIS news]
BUCHAREST (ICIS)--The Romanian government is waiting for European Commission approval on plans to secure a loan of around €45m ($59m) to enable production to resume at majority state-owned chemical company Oltchim, economy minister Varujan Vosganian said on Tuesday.
“We plan to get the money from local banks and hope to get an answer from [the commission] as soon as possible,” Vosganian added.
Government plans to provide state financial support to Oltchim have to be approved by the European Commission.
Oltchim’s units at Ramnicu Valcea in southern Romania are currently working at around 10% capacity, and production at its site has been severely restricted for more than a year as a result of a lack of working capital to secure feedstock supplies.
The Romanian government decided on 23 January to start insolvency procedures, in a move intended to pave the way for the company’s future privatisation, due to the group’s current economic problems.
According to a preliminary audit report presented on Tuesday, Oltchim has debts of around €800m, and needs a further €200m.
“The situation at Oltchim is very difficult, but by 12 March we will present a final report, including a clear plan for company’s privatisation,” said lawyer Gheorghe Piperea, from Rominsolv and BDO Business Consulting.
Last month, Rominsolv and BDO were chosen to take an audit and propose a plan for restructuring Oltchim.
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.
($1 = €0.76)
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