Romanian chemical company Chimcomplex, part of SCR group owned by local investor Stefan Vuza, will submit an offer “in excess of €100mn” for the core assets of bankrupt Oltchim chemical plant, news.ro reported. The bid will most likely be for all the assets put up for sale.

Oltchim, 54.8% owned by the Romanian state, has been having financial difficulties for years, and an attempt to sell of its assets has now been launched. The investor plans to invest another €450mn, out of which €150mn will be invested in the first two years, if it is successful in taking over Oltchim’s assets.

In mid-August, Oltchim launched the bidding procedures for the core assets of the company, split in several bundles, of which nine bundles have been put up for sale so far. The procedure prevents state aid-related complications, the ministry of economy later explained in a statement. Bids are expected by September 30 and the bidders can submit offers for all or some of the bundles.

There are reportedly already three investors interested in acquiring the nine asset bundles, one of Oltchim’s administrators claimed on August 24, without naming them. The contracts could be signed by the end of the year, Gheorghe Piperea told News.ro.

Negotiations with investors are advanced, but are currently suspended following the launch of a European Commission investigation into Oltchim. They will be restored after the commission’s conclusion is made public, between September 20 and 25, according to Piperea.

Chimcomplex is interested only in the core assets of Oltchim located in Ramnicu Valcea, and it is not interested in Oltchim’s petrochemical unit located in Bradu on the platform of the former refinery Arpechim. Oltchim’s press release does not specify, but it implies that Bradu petrochemical unit is not part of the nine bundles. Oltchim took over 100% of the Bradu unit, registered as Petrochemicals Arges, for €13mn from OMV Petrom in 2009.

“We will definitely submit an offer for Oltchim. We have contacted already the audit firm and will meet them on September 9. We are interested in all of Oltchim’s assets that are located in Ramnicu Valcea, not including the petrochemical platform Bradu that is part of [dismantled] refinery Arpechim,” explained Vuza.

Financial results reported this year and in 2015 confirm that the losses incurred in the past that led to Oltchim's insolvency were the result of corrupt management. The company was controlled by the state, with 54.8% of the shares, until it entered insolvency in 2013. Oltchim estimates its revenues would rise from €170.2mn last year to €176.5mn in 2016 while its adjusted Ebitda would rise from €17.7mn last year to €23.9mn this year. Ebitda is adjusted for the losses of non-core assets and Bradu petrochemical unit and for the one-off costs such as the advisory fees. The adjustment suggests that Bradu unit is not part of the nine bundles.

Vuza has also commented on the sale of Oltchim’s assets in nine separate bundles – a choice publicly debated since it puts at risk the continuation of activity. It does not make much economic sense, perhaps splitting them in two or three bundles would make sense, he said.

The ministry of economy confirmed last week that Oltchim’ creditors, which are in control of the company during the insolvency procedures, have initiated the bidding procedure for the core assets split into several bundles. The ministry specified that European Commission, which was notified about the privatisation procedures, has not imposed any specific solution for the continuation of the insolvency process.

Although not involved in the process, the ministry acknowledged that the current solution preferred by the creditors, namely the sale of the core assets in bundles of assets, prevents legal complications related to the state aid previously received by Oltchim.

The European Commission said on April 8 it has started an in-depth investigation to verify if the debt write-offs by the Romanian state and continued supplies by state-owned companies to local petrochemical company Oltchim were in line with EU rules.

It was declared insolvent in 2013. Since then, it has been in the process of reorganisation following a plan established by the insolvency administrator, with the aim of paying past debts from the proceeds of a future privatisation. As the estimated sale price in the event of a privatisation would not cover the entire debt, Oltchim's public creditors have accepted total or significant debt waivers.

“Following the economic difficulties of Oltchim and the cancellation of public debts owed by the company, we need to verify whether a private creditor would have accepted to act in the same way,” commissioner Margrethe Vestager in charge of competition policy said.