Romania receives no bids for petrochemical plant Oltchim's assets

By bne IntelliNews June 9, 2014

Romania has received no offers in the sale of the core assets of petrochemical plant Oltchim by the June 6 deadline, Ziarul Financiar daily announced quoting a company press release.  

Olthim has been under insolvency procedures since January 2013. It tries to sell its core assets, registered as a special purpose vehicle Oltchim SPV, in order to pay most of its bank loans. The state owns 55% in Oltchim – but the money from the sale of the core assets will be used to pay back the bank creditors and not for the shareholders.

The court-appointed managers of the company might however set another deadline for the sale, the statement quoted by the daily informed. One of the potential bidders has issued such a request, the daily indicates.

GOVERNMENT REMAINS OPTIMISTIC. The government will in no case let the petrochemical plant Oltchim be closed down, economy minister Constantin Nita told a news conference earlier. If it is not sold on June 6, the company will be definitely privatised at a later moment, he has concluded.

A statement of his ministry, quoted by news agency Mediafax, mentions Chinese investors as being highly interested in the company – as well as in other large-scale projects such as the two nuclear reactors at Cernavoda, the 1GW hydropower plant Tarnita-Lapustesti, one coal-fired power plant, the Craiova-Pitesti motorway and the Constanta-Bucuresti high-speed railway. Minister Nita also reiterated the talks with OMV Petrom regarding the Arpechim refinery - which investors reportedly have asked to included in a bigger Oltchim-Arpechin package. OMV Petrom’s Arpechim is currently under conservation.

Oltchim is currently bankable, PM Victor Ponta said quoted by Ziarul Financiar daily. The company has undergone all restructuring stages, he explained.

Oltchim reported a EUR 12.5mn loss and EUR 30.2mn revenues for the first quarter of 2014. Revenues indeed increased by 65% y/y while the loss narrowed by 35% y/y – but the company’s profitability remains deeply negative. It should not accumulate more losses, minister Nita stated, adding however that in order to achieve a break-even Oltchim needs more investments to start operations at one or two more of its production lines.

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