AVAS receivable is worth RON1.12 billion, while the new shares will be issued for subscription to minority shareholders.
Oltchim will approve the share capital hike in a stockholders’ meeting September 10, the company said in a statement sent to the Bucharest Bourse Thursday.
Oltchim has a share capital of RON34.3 million.
The minority shareholders should have right of preference on subscribing 930.7 million shares of the total of 20.59 billion new shares, proportionally to the owned shares in Oltchim. All unsubscribed shares will be annulled.
According to a Government memorandum, the conversion into shares of Oltchim debt to AVAS should be made by end-August.
Oltchim is majority owned by the Economy Ministry, with a 54.79% stake and the government plans to sell its stake in Oltchim at the end of the third quarter or in early fourth quarter.
According to most recent data, Germany’s PCC holds 18.32% of its shares, while UK-registered investment fund Carlson Ventures owns a 14.02% stake, through Nachbar Services.
Premier Victor Ponta has recently said the company will be sold “these months,” while Economy Minister Daniel Chitoiu recently said the government has approved a state guarantee for a EUR40 million loan for the company. Oltchim, which was placed under special administration late June with a view for privatization, will use the money to finance working capital and prevent further loss.
Oltchim reported a loss of RON82.8 million (EUR19 million) in the first quarter, from RON2.64 million in the same period of 2011.
Total revenue decreased 49.3% to RON263.4 million in the first quarter, while overall costs were down 33.7% to RON346.2 million.
Oltchim had debts of RON2.55 billion at the end of March, mainly to energy company Electrica, banks and privatization authority AVAS. (EUR1=RON4.5362)