Oltchim, the insolvent Romanian state owned PVC and chemicals company, has at last found buyers for significant areas of its assets.
The Râmnicu-Vâlcea-based firm confirmed that national chemical company Chimcomplex Borzesti is to acquire five of the asset packages for sale, including part of Oltchim’s PVC and VCM capacity, for around €127m.
Other operations to be bought by Chimcomplex Borzesti comprise Oltchim’s chlor-alkali, oxo-alcohols and propylene oxide polyols businesses. The purchase is in line with a plan by the Chimcomplex owner Stefan Vuza to establish a large, regional chemical industry player, Compania Română de Chimie in order to relaunch Romania’s chemical sector.
Also successful in the latest asset sale was local PVC profiles and accessories distributor Dynamic Selling Group SRL. The firm, based at Galaţi, Romania had already bought some of Oltchim’s PVC profiles business Ramplast back in 2013 for which it is now the distributor.
In the latest sale, Dynamic Selling Group is to acquire the PVC profile processing operations of Ramplast still controlled by Oltchim for around €1.9m. Both this deal and that with Chimcomplex are worth more with the addition of VAT.
The third bidder involved in the sale, London-based investment firm White Tiger Wealth Management Ltd. with offices in New York, Hong Kong and San Marino, also aimed to purchase Oltchim’s chlor-alkali manufacturing business.
However, the investment firm, some of whose target assets coincided with operations favoured by Chimcomplex Borzesti, subsequently refused to sign the asset sale contract and withdrew unilaterally from the transaction.
Completion of the deals was still subject to certain conditions, including final approval of the winning bids by a general meeting of Oltchim creditors, according to a company statement to the Bucharest stock exchange.
However, the overall sell off process is not scheduled to be finalised until the first half of next year, officials have explained.
Meanwhile, the latest financial results from Oltchim’s current operations show continued improvement, in spite of rising costs. The company registered a €6.1m net profit in the first half of 2017, up by 48.8% over the same period last year, on a €105.8m turnover.
That annual half year sales figure is 27% higher than the turnover for the equivalent period in 2016. Overall last year, Oltchim reported a €2.5m net profit for the year against a loss of €10.5m during the previous year.
The latest growth results were achieved against a background in the first six months of 2017 of rising raw material and utilities prices over those in first half 2016. These included significant 50% rise in the price of Oltchim’s main raw material propylene and a 6% hike in the cost of electricity.