Exall says it has enough money for Oltchim

Canada-based Exall Resources will pay the more than $9 million it owes the Privatisation Authority for the controlling interests in Oltchim Ramnicu-Valcea plant today, governmental sources told Ziarul Financiar.

The Canadians, who failed to comply with the initial payment deadline, that is July 24, met with Privatisation minister Ovidiu Musetescu on Tuesday, to reassure him they had found the money this time.

“The payment is still uncertain, as the Exall officials may have said they got the money, but there’s no proof to verify it. Furthermore, the Canadians have also requested postponements of the deadlines for the investments they are bound by contract to make,” the quoted sources said.

Exall Resources Limited pledged by signing the contract for buying Oltchim to invest $150 million in three years, $100 million of which in cash, within a year since the date of stock ownership transfer.

If the August 23 deadline is not met, the Exall- Privatisation Authority (APAPS) contract becomes null and void and the Canadians stand to lose the $700,000 deposited as warranty.

Exall is a medium-sized mining company, dealing in gold mining especially. The Canadian Group, which made some $20 million in total annual revenues, registered losses over the past two years.

The financial situation of the company and its size compared with Oltchim’s ($220 million in turnover) have fuelled various rumours questioning Exall’s capability of observing the contract with APAPS lately.

The privatisation contract between Exall and APAPS was signed on April 27, with the initial payment deadline set for July 24.

The Canadians, however, were unable to come up with the money by that day, much to the joy of those claiming it is not possible for a company with only $20 million in yearly turnover to become owner of a company that sells $220 millions’ worth a year.

The latest rumours say Exall has lost financial support from the investors with which it had teamed up for Oltchim’s privatisation (PVC – England, EBRD, SNC Lavalin – Canada and International Finance Corporation), and that an Italian company dealing in the same field as Oltchim displayed interest in the Ramnicu-Valcea based plant.