Ministry confirms interest in Oltchim from China, Romania, Hungary

13 February 2014 14:10 Source:ICIS News

LONDON (ICIS)--Consortia from China, Romania and Hungary have expressed an interest in bidding for a debt-stripped version of Romanian state-controlled chemical producer Oltchim, Romania's economy ministry said on Thursday.

Talks were also under way with Azerbaijan's State Oil Company of the Azerbaijan Republic (SOCAR) and two Turkish companies to establish whether they would bid, it added.

However, main minority shareholder in Oltchim, Germany's PCC, which says it holds 34.32% directly and indirectly, and proposed bidding partner Israeli private equity investment fund Fortissimo Capital, announced they have decided not to participate in the bidding for the assets of the chemical company.

In a statement, Wojciech Zaremba, the representative for the PCC energy, logistics and chemicals group in Romania, said: “The current situation of the production plants and the conditions in which the [bidding] procedure will take place are at the bottom of this decision... PCC has gradually lost interest in purchasing Oltchim.”

Romania's economy ministry has a 54.8% controlling stake in Oltchim.

Its main products include polyvinyl chloride (PVC), polyols, dioctyl phthalate (DOP) and caustic soda but a lack of feedstock and working capital has pushed production output down to around 20% of capacity, the company said.

The privatisation is offering a debt-free version of Oltchim named 'Oltchim II', with the ministry proposing to direct proceeds from the sale into paying off debts of the original company.

Oltchim was put into insolvency in January this year by the economy ministry after an initial attempt to privatise it collapsed when a tycoon's winning bid was subsequently thrown out by privatisation officials.

By Will Conroy