Troubled Romanian petrochemical plant Oltchim put on sale again in nine asset bundles

By bne IntelliNews August 24, 2016

Romania’s Oltchim petrochemical plant, one of the largest chemicals companies in Southeast Europe, will be put up on sale in nine assets bundles, the company announced on August 23.

Oltchim, which is 54.8% owned by the Romanian state, has been having financial difficulties for years. It was declared insolvent in 2013. The Romanian authorities have repeatedly attempted to privatise Oltchim but without success. The most recent failure was at the end of 2014, when no interested bidders came forward. However, the company’s financial situation has recently improved.

“Oltchim will launch a competitive process for the sale of the assets of the company, grouped in more bundles, currently being envisaged by nine of such bundles,” the company said in a press release.

Interested investors will be able to submit letters of interest for any of the nine packages until September 30, and Romanian Economy Minister Costin Borc expressed his hope that Oltchim would receive a binding bid by the end of the year.

“Oltchim was one of the priorities I set even from the beginning of my mandate,” Borc said. “Although it is insolvent, Oltchim’s financial situation has improved, which gives hope for finding an investor, and consequently for a sustainable future of the economic activity of the company,” he added.

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.

In April, the European Commission started an in-depth investigation to verify if the debt write-offs by the Romanian state and continued supplies by state-owned companies to Oltchim were in line with EU rules.

Specifically, the commission is investigating the accumulation of debts owed to the Romanian Authority on Managing State Assets (AAAS), debt cancellations by AAAS and various state-owned enterprises under the insolvency administrator's reorganisation plan and the support to the operations of Oltchim by two state-owned companies (CET Govora and Salrom) which, despite the deteriorating financial situation of Oltchim, continued supplies of electricity, steam and saline solutions to the chemical plant.

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