Oltchim plant files for insolvency

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The decision is meant to protect the company against creditors.

The Valcea Tribunal admitted the request of the Board to accept the insolvency procedure request filed last week and the statement about the intention to reorganise under judiciary control SC Oltchim SA, based on a reorganisation plan, realitatea.net reports. The decision made by the Valcea Tribunal may be appealed within seven days. The government approved Wednesday, 23 January 2013, the memorandum on the insolvency of SC Oltchim SA. Under the procedure, the company will enter judiciary reorganisation based on a reorganisation plan in line with the provisions of the Law on the insolvency procedure. The measure is meant to protect the plant against its creditors.The court designated lawyer Gheorghe Piperea as judiciary administrator. From now on, the immediate measures are closing all bank accounts in favour of the unique insolvency bank account, then all repossession procedures will be suspended and claims will be frozen. “The plant is operational, and protests are out of question. We will sit at the table and discuss with the judiciary administrator about what is to be done,” the trade union leader of Oltchim, Corneliu Cernev told Mediafax.

According to Economy minister Varujan Vosganian, the insolvency of SC Oltchim SA in view of restructuring does not eliminate the need for a state aid in order to restart the   plant at a production capacity of at least 65 pc: “Even if SC Oltchim SA enters insolvency in view of reorganisation, we still must make a capital infusion, and everybody agrees it. This cash contribution is considered as state aid and must be notified to the European Commission,” the minister explained.In his turn, Mihai Diculoiu, the leader of the Oltchim Free Trade Union said that the insolvency of SC Oltchim SA must be supported through a minimum capital contribution of EUR 45 M. “The EUR 45 M are needed to restart the Valcea-based chemical plant at a capacity of over 65 pc, which will ensure its profitability. Without this money, the insolvency will end in bankruptcy,” the union leader added. Unionists hope that the restructuring through insolvency will not cause massive layoffs and asked authorities to respect the collective work contract.Petro Carbo Chem SE, the main minority shareholder in SC Oltchim SA, wants to be also involved in the administration of the insolvent company.

Oltchim shares lost almost 48 pc in four days

The shares issued by Oltchim Ramnicu-Valcea collapsed at the Bucharest Stock Exchange these days, in reaction to the fact that Oltchim will become insolvent. The bourse increased by 0.35 pc in early trading Wednesday, when the shares of Fondul Proprietatea dominated the transactions, and Oltchim advanced by 0.4 pc, slightly picking up after a 48 pc drop during previous days, when investors were expecting the decision of the Valcea Tribunal over the insolvency of the company. The first transaction with Oltchim stock was made at a price 9 pc under Tuesday’s closing, then the price increased for a short while, in transfers with smaller volumes than during previous sessions. In the first hour of transactions, the price returned to green again, then remained on slight decrease until the middle of the day, when it picked up, but without enthusiasm. At 1.00 PM, Oltchim traded at RON 0.3007, 0.4 pc above the closing price of Tuesday. Transfers only cumulated RON 28,000. Following the correction operated in the previous four sessions, the capitalisation of the company at the stock exchange decreased by RON 94 M (EUR 21.7 M).