Romania Gives Up Plans To Shut Down Oltchim If Privatization Fails

05.13.2011 By Florentina Dragu

Romanian government gave up its plans to shut down chemical plant Oltchim Ramnicu-Valcea (OLT.RO) if privatization procedures should fail in 2011, according to the country’s letter of intent to a EUR3.6 billion loan agreement with the International Monetary Fund.

The government reiterated plans to sell its stake in Oltchim by year-end and to identify a viable strategy to reduce the company's losses, the document, obtained by MEDIAFAX Thursday, said.

It noted the authorities want to hire a legal consultant to advice on the company's privatization by end June, as well as an investment bank by September to broker the deal.

Auction procedures are due for completion by end-2011.

The letter leaves out previous plans to decommission the plant unless the sale is successful.

Oltchim reported a loss of 2.64 million lei (EUR627,000) in the first quarter, substantially narrower from RON52.8 million in the same period of 2010.

The Economy Ministry owns 54.79% in Oltchim. (EUR1=RON4.0997)