China’s Baota Petrochemical Group and Junlun Petroleum are considering to extend a EUR 20mn loan to ailing Romanian company Oltchim, Bursa daily reported. The loan would come prior to the planned privatisation of the Romanian company.

The technical details of the deal are not clear yet, but it might give an advantage to the Chinese investors in the planned sale of the Romanian company early next year. Romanian managers are discussing this week the loan, the daily reads.

The two Chinese companies have signed in late November a letter of intent with the court-appointed managers of insolvent chemical plant Oltchim, the daily said.

Oltchim’s creditors endorsed on December 2 the management’s plans for i. the setting up the special purpose vehicle Oltchim SPV and ii. evaluating the assets that are going to be transferred to Oltchim SPV. The core assets of Oltchim will be transferred to the SPV that will be later sold to investors. Meanwhile, the managers announced that binding offers for Oltchim SPV are expected by Jan 31, 2014.

Sources told the Bursa daily that the liquidation value of Oltchim’s assets would be EUR 170mn, while the assets’ going-concern value is estimated at EUR 290mn.