Oltchim privatisation fails again

Oltchim Power Plant

The privatisation of Oltchim has failed again, as no investor submitted intention by the deadline of December 12, 2014. It is for the fourth time in 2014 that the privatisation fails. The previous deadline had been June 6, 2014. The target price for the Oltchim-Arpechim package was of EUR 300 million, the agreed investor should have taken over also the environment-related obligations for Arpechim refinery. It also should have invested several hundred millions of EUR to restart all equipment of the two units. The favourite investor to take over the plant was the Chinese consortium made up of Baota Petrochemical Group and Junlun Petroleum, which requested two times an extended deadline for Oltchim privatisation. The Chinese representatives initially voiced interest in buying Oltchim together with Arpechim. Then, recently, they voided intent to buy only one section of the plant, but finally they submitted no offer. Under the circumstances the official receiver of the plant is to draw up the reorganisation plan expected to be voted upon by the Creditors’ Committee on March 10, 2015. Until then the Oltchim SPV is to be set up. The SPV is supposed to be Oltchim 2, which would get together the plant’s viable assets, including the Arpechim refinery. The unsecured loans will remain as duty for the older Oltchim and, most probable, would be poorly recuperated. The plant entered insolvency in January 2013 and is currently working at 30 percent capacity. Although the privatisation of Oltchim Ramnicu Valcea plant has failed for the fourth time in 2014 due to lack of offers, it seems a Chinese company is still interested. The Economy Ministry has received an offer coming from a Chinese company interested in taking over Oltchim, however the company requested for the moment an extension of the deadline, said Mihai Tudose, the new Economy Minister. “An offer was submitted to the Economy Ministry from a Chinese company interested in taking over Oltchim. For the time being it requested an extended deadline for submitting the offer. The good news is that Oltchim has reached operational profit. Nevertheless it has debts amounting to RON 700 million, but we intend to convert these debts into shares and, on this basis, the unit could become bankable and, together with an investor, we should solve the situation,” the official said

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December/January 2015

June 2017