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Oltchim will not be closed and if the chemical plant is not privatized on June 6, as the government committed itself to doing, it will be sold at another date, Economy Minister Constantin Nita stated.
“Oltchim represents an objective for the government,” Nita stated at a forum on energy issues. The minister added that Oltchim has to stop tallying losses and in order for that to happen it has to find the financing needed in order to reopen one or two production lines. “There are investors that want to buy both Oltchim and Arpechim (Oltchim’s main supplier of raw material, controlled by OMV Petrom – editor’s note). We are having talks with OMV Petrom too,” Nita added.
Multiple attempts to sell Oltchim failed in recent years. The most recent occurred in March, when the state failed to attract any bids. The state owns 55.7 percent of Oltchim shares, through the Economy Minister. The plant filed for insolvency in January 2013.
In Q1 the plant registered a turnover of RON 136.2 M (EUR 30.2 M), up by 64.7 percent compared to the same period last year back when it registered a turnover of RON 82.7 M, and losses of RON 56.2 M (EUR 12.5 M), down by 34.6 percent compared to the RON 86 M registered in the same period last year. Almost 67 percent of Oltchim’s turnover, namely RON 91.1 M, is generated by its petrochemical activity.
At the same meeting, Minister Nita stated that the initial public offering through which Electrica wants to sell 51 percent of the shares issued through a capital increase will take place on June 16-25, and the company’s floating on the Bucharest and London stock exchanges is estimated for July 3.
The offer through which Electrica wants to sell new shares representing 105 percent of registered capital will consist of three installments, and investors will be able to buy shares on the Bucharest Stock Exchange as well as GDRs on the London stock exchange. Through this offer the state seeks to transfer 51 percent of the company’s shares (177.18 million shares) to private investors. Electrica is currently owned by the state in its entirety.
The offer is intermediated by a consortium formed by BRD, Citigroup, Raiffeisen Bank, Societe Generale and Swiss Capital. A price stabilization mechanism can be applied after listing, if the quotes will start to drop, a mechanism through which some of the brokers that are part of the consortium will buy Electrica shares or GDRs with a part of the money attracted through the offering, in order to stop the fall. For price stabilization the aforementioned brokers will have at their disposal 4.75 percent of the money Electrica will obtain through the offering.