A fresh chapter has opened in the continuing saga of Romania’s debt-ridden Oltchim PVC and chemicals company with the firm filing for insolvency.
The move by the state-run firm is designed to allow it to restructure its business to make it more attractive to potential investors, according to the Romanian government.
Meanwhile, a foreign Oltchim shareholder and previous bidder for the firm, the Duisburg, Germany-based chemical company PCC SE. has increased its holding from 18.3% to 32.3%. It bought the 14% stake of another minority shareholder, London-based investment fund Carlson Ventures International.
An attempt by the government to privatise Oltchim late last year ended in farce when the successful bidder, a Romanian TV tycoon failed to come up with the agreed €45m purchase sum.
Romania has now chosen the insolvency route after talks with the International Monetary Fund (IMF) which has urged the government to sell off Oltchim. The IMF has imposed a condition that Romania sell off state owned businesses in order to reach a loan agreement.
Prime Minister Victor Ponta pointed to success in a similar case last year when another ailing state run company, Hidroelectrica filed for insolvency after it was on the brink of bankruptcy. Since then it has returned to profitability, he said.
In October 2012, some parts of Oltchim’s idled Râmnicu-Valcea plant, including the propylene oxide and polyether polyols units resumed production. Output, begun at about 30% of capacity employing 800 of its 2,600 workforce, was due to increase to about 60%.
In the first nine months of 2012, Oltchim’s losses rose 72% year on year to around €70m. Its revenues fell by 47% to €163m over the same period.
Oltchim’s legal administrator is scheduled to present a report on the company’s latest situation in mid-April.