Romanian Oltchim's Debt To Become Stock, Not History - CEO

05.16.2011 By Andrei Circhelan

Romania will not erase the debts owed by chemical company Oltchim (OLT.RO), but it considers turning the debt into stock, in view of privatizing the company, Oltchim general manager Constantin Roibu told MEDIAFAX Friday.

"Some of the propositions discussed include the conversion into stock of some of the debts owed to the state, suppliers and banks. The erasing of debt is not an option, and the issue needs to be addressed by the time a task book is published for the company's privatization," Roibu said.

The Economy Ministry, majority holder in Oltchim, on Friday said, without exemplifying, that multiple options are considered to solve Oltchim's debt situation.

At the end of March, the plant had debts of 2.35 billion lei (EUR573.2 million), while receivables stood at RON285.17 million (EUR69.5 million).

The government committed to the International Monetary Fund to sell Oltchim by the end of the year, according to the country's letter of intent to a EUR3.6 billion loan agreement with the fund.

Oltchim, which has some 3,500 employees, posted a net loss of RON2.64 million and sales of RON464.69 million in the first quarter.

The Economy Ministry owns 54.7% in Oltchim, while German PCC SE holds 12.1% and UK Carlson Ventures International holds 13.9%. (EUR1=RON4.106)