In 2002, Oltchim owed a total 508.6 million lei (EUR119.3 million) to the Finance Ministry, since the ministry paid guarantees on external loans contracted by the company. AVAS took over the receivable from the Finance Ministry.
The government decided in 2009 to convert the debt into stock, and the overall value of new shares issued will include the interest rate agreed between Oltchim and AVAS.
An Oltchim report posted Wednesday on the Bucharest bourse notes that the interest rate will be calculated using the highest level of interest applied by the European Commission to state aid refund between the date of Romania’s EU accession and the date of debt-to-stock conversion. Another element factored in will be the interest rates applied by banks when lending money to Oltchim starting January 1, 2007.
The debt-to-stock conversion, decided by authorities in 2009, requires European Commission approval.
The interest rate talks will be set up by Oltchim shareholders in a meeting held on August 29.
The company is 54.8% owned by the Economy Ministry, while German PCC holds 17.4% and British investment fund Carlson Ventures holds 14.02%.
Oltchim shares were trading Wednesday at RON1.46 per unit, down 0.14% on the day. (EUR1=RON4.2609)