Oltchim state sell-off postponed again

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The long anticipated privatisation of insolvent Romanian PVC producer Oltchim, due to have been settled at an auction in late March, has been postponed again, this time till mid May.

A 28 March deadline for filing binding bids to purchase Oltchim SPV, the ‘special purchase vehicle’ containing core debt free assets of the Oltchim chemical company, passed with no offers received. One foreign bid is reported to have been received after that deadline.

The further 45 day delay was agreed by the Romanian government at the request of key potential bidders who are hopeful of being offered an enhanced package including the Romanian Arpechim oil refinery.

Those would-be investors, said by Oltchim’s administrators to include a Chinese consortium and a Romanian investment fund, are waiting for the government to conclude purchase talks with Pitesti-based Arpechim’s owner Petrom, part of the Austrian OMV oil group.

The government is expected to combine Oltchim SPV assets with the Arpechim refinery, which was shut down by Petrom two years ago.  Oltchim acquired Arpechim’s petrochemicals business, including an ethylene cracker and low density/high density polyethylene extraction, in 2010, but has suffered from a serious feedstock shortage.

Companies in the Chinese consortium interested in buying the enhanced Oltchim package are understood to be Baota Petrochemical Group and Junlun Petroleum, while the Romanian bidder is said to be SIF Transilvania.

Râmnicu Valcea-based Oltchim, with debts still amounting to €700m, employs around 2,000 and has been operating at less than 30% of capacity.   

The successful buyer of the package is likely to have to deal with environmental liabilities at the Arpechim refinery amounting to several hundred euros, according to Romanian media reports.

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