Petrom can take another 62m euros from the state

Oltchim Ramnicu Valcea (OLT), the most indebted company on the Bucharest Stock Exchange, with an around 400 million-euro debt, will take out a 62 million-euro loan to acquire Petrom’s petrochemical division Arpechim Pitesti. The decision was made by the state, majority shareholder of the plant, with a 54.79% stake, in the General Meeting of Shareholders on Friday. The loan is to be 80% guaranteed via a letter of guarantee worth 49.6 million euros issued by Eximbank, while the rest of the sum will be backed by fixed assets held by Oltchim, amounting to 55.6 million RON (13 million euros). The loan will be contracted over a six-year period, with a one-year grace period. “I think the state has no other choice but to help the plant. Oltchim is not a business going very smoothly right now, so I think a long-term plan is needed.
62 or 100 million euros will only be a short-term solution for the plant’s problems. Another solution would be to sell the plant,” says Marius Muresan, analyst at STK Financial.