Following the operation, the Romanian privatization authority AVAS will become majority holder in Oltchim.
Florin Laurentiu Vladan, head of Romania’s industry privatization office OPSPI, and Bogdan Chiritoiu, president of the Competition Council, both confirmed the information.
In 2009, the government approved a debt-to-equity swap of public debt worth some EUR135 million for Oltchim Ramnicu Valcea, one of the largest petrochemical companies in Romania and in South-East Europe.
Romania notified the European Commission on two support measures in favor of Oltchim, including the conversion into shares of the public debt, which stems from the triggering of state guarantees on non-performed commercial loans contracted before 2000.
The second measure referred to a state guarantee amounting to EUR339.2 million (covering 80% of a commercial loan of EUR424 million), to be used for investments necessary for the implementation of the company’s development plan.
Oltchim is majority owned by the Economy Ministry, with a 54.79% stake, while Germany’s PCC holds 12.16% of its shares.
Romania has been trying to privatize the chemical company ever since 2007. Under a EUR5.4 billion loan agreement signed with the EU, the International Monetary Fund and the World Bank, Oltchim should be privatized in 2012.