Romania Vows Quick Privatization Or Liquidation For Oltchim - Draft

05.10.2011 By Andrei Circhelan

Romanian chemical company Oltchim (OLT.RO) will be liquidated if the government fails to privatize it by the end of the year, according to the draft letter agreed on May 3 between local authorities and the International Monetary Fund.

The document includes an agenda of extremely short deadlines for the privatization of Oltchim, and should the measures fail the company will be privatized.

In the draft letter, Romanian authorities pledged to appoint legal advisor by end-June, an investment bank for privatization by end-September. The government envisages "the completion of the tender by end-2011."

In addition, the government commits to find a solution for Oltchim's debts within the next several months.

"If the privatization is unsuccessful by the end of 2011, the firm will be placed in liquidation," the document concludes on Oltchim.

Asked by MEDIAFAX whether the final draft of the letter still mentions the liquidation of Oltchim, the head of the IMF delegation to Romania, Jeffrey Franks, declined to comment.

The chemical plant has some 3,500 employees and it has concluded the first quarter this year with a loss of 2.64 million lei (EUR646,000), significantly narrower than RON52.8 million in the same period of 2010.

Oltchim has a share capital of RON34.3 milion, divided into 343 million shares with a face value of RON0.1. The stock is 54.7% owned by the economy ministry, while German-registered PCC holds a 12.1% stake. Carlson Ventures International has recently raised its stake in Oltchim to 11.92%.

Oltchim shares closed up 6.82% Tuesday, to RON0.47. (EUR1=RON4.0885)