Florin Vladan, head of OPSPI, the authority subordinated to the Economy Ministry that handles the privatization and the listing of some of the leading companies in Romania, such as Hidroelectrica, Romgaz and Oltchim, says there is the possibility of the program being blocked, given the Government change.
“I don’t know what to expect. I would like there to be no more delays of the offerings and the privatizations. I haven’t seen a very clear stance in favor of continuing with these listings and privatizations, quite the contrary – the listing of Transelectrica and the privatization of Cupru Min have been criticized,” Vladan says.
The head of the privatizations and listings authority says they should continue because if the program is blocked, it will be difficult to resume it.
“Oltchim is in a critical situation, it doesn’t have financing even for its daily operations, it is working at 20-25% of its capacity. The longer the privatization is put off, the harder it will be for the company to be privatized.”
The first signal could come as early as next week, after the Government gets its investiture vote. If the management of the privatizations authority is changed, there will definitely be delays, at least until the new bosses get settled in and have the first talks with the intermediaries appointed to handle the privatization of Oltchim and the offerings scheduled on the stock exchange.
Oltchim had until March 31 cumulated overdue payments of RON525.5 million (around EUR120.8 million). The value of Oltchim’s overdue payments climbed by 80% in the first three months of this year alone, with the company being in arrearage as a result of its inability to acquire raw materials necessary for its production, while interest rates on loans taken out from banks have continued to pile on. At the same time Oltchim has to pay wages for the company’s over 3,300 employees.
The IMF set as a condition to the government to finalize Oltchim’s privatization process by the end of April, but the deadline has expired, with the state’s representatives starting the preliminary stage of the privatization two weeks before the final deadline, with the process set to take several months because it is an atypical one, involving many unknowns.
In the first stage of the privatization the four interested companies presented to representatives of the privatizations authority – their business plan and their opinions on what the tender documentation should look like, after which the second stage of the privatization was set to start.
The final part of the privatization process was supposed to be a sealed-bid auction, which was estimated to take place on May 31, but could now be delayed or even put off because of the fall of the Government led by Mihai Razvan Ungureanu and because of replacements made in the ministries’ top management structures, including the top job of Minister of the Economy, for which Daniel Chitoiu was nominated.
Because it is in arrearage, Oltchim cut its sales in the first quarter by 45%, to RON254.5 million (EUR57.7 million), while losses went up 31 times to RON2.6 million between January and March 2011.
Last month four investors submitted preliminary non-binding offers for Oltchim to the Ministry, among whom German-held PCC, a minority shareholder of Oltchim, which together with Carlson fund own almost 33% of the shares, Russia’s Tise, which has giant Gazprom among its shareholders, businessman Stefan Vuza, who controls industrial group Serviciile Comerciale Romane (SCR) and construction firm Pegamont Ploiesti held by businessman Mircea Apostolescu. (EUR1=RON4.4078)
(English version by Daniela Stoican)