Romania's Oltchim expected to be split up for sale
16 September 2016
Following numerous rescue and privatization attempts, and just as many disappointments, it now appears that at last the Romanian state owned chemicals company Oltchim SA will now be sold off piece by piece.
After years of waiting, Romania’s biggest chemicals operation, 54.8 percent state owned and bankrupt since 2013, is now being divided up into nine separate business units for sale to private sector investors.
Oltchim administrators have hired U.S. management consultants with A.T.Kearney to advise them for the sell-off, according to local media.
In mid-August, the joint administrators divided up its main assets into business bundles, of which nine were immediately put up for sale to private investors. Interested parties have until Sept. 30 to bid for all or some of the assets.
Days after the sale offer was launched, it emerged that three unnamed potential buyers had expressed an interest in bidding, Gheorghe Piperea of RomInsolv SPRL, one of the joint Oltchim administrators told Romanian media. He predicted contracts for the sale of the bundles could be signed by the end of the year.
One potential Romanian bidder for parts of Oltchim, who failed to win a public auction for the business three years ago, has reiterated his interest in the privatization. Stefan Vuza, owner of a leading national industrial group SCR which runs chemical producer Chimcomplex Borzesti, said he wants to integrate some Oltchim assets with his firm.
He was reported to be willing to commit “more than 100 million euros” ($112.5 million) to acquire the core assets of the Oltchim chemicals site at Râmnicu-Vâlcea in central southern Romania. Vuza was reported to plan investment of another 450 million euros ($506 million) if he was successful in buying the firm, 150 million euros ($168.7 million) of this spent in the first two years of ownership.
But the entrepreneur stressed that he was only interested in acquiring core Oltchim assets at its main site and not other units, including a 200,000 metric tons per year ethylene cracker, at the Bradu petchems platform, part of the dismantled Arpechim refinery site at Pitesti, Romania, Oltchim acquired from OMV Petrom in 2009.
However, negotiations on the sale of Oltchim have been suspended pending the outcome of a European Union investigation into whether the actions of the Romanian government over Oltchim complied with EU regulations on state aid.
Bidding negotiations will resume when the EU commission’s study conclusion is made public between Sept. 20 and 25, Piperea was quoted as saying.
Oltchim sank into bankruptcy after mounting financial difficulties, but is continuing to operate and last year surpassed results expected in a reorganization plan. The firm recorded better adjusted pre-tax profits of 17.7 million euros ($19.9 million) on sales of 170.2 million euros ($191.6 million) in 2015.
It predicts the adjusted pre-tax profit for this year will rise to 23.9 million euros ($26.9 million) with sales up to 176.5 million euros ($198.7 million).
During 2016, Oltchim planned to raise operating capacity by up to 35 percent and was expected to start producing a new product, a plasticizer used in PVC processing following an upgrade.
Source : plasticsnews.com