The state is rid of Oltchim

Negotiations aimed at the sale of petrochemical plant Oltchim Ramnicu Valcea were concluded at the end of last week, when a contract was signed by the Authority for Privatisation and Canadian group Exall Resources.

The sale of the plant was achieved after a long period of negotiations, which started last fall, when the Canadian company was designated the winner of the privatisation tender.

Exall Resources competed in the privatisation race against Romarta 2000, a company belonging to investment fund Broadhurst, which also submitted a bid. The 53.2% stake the Romanian state used to hold in Oltchim was slated for sale in September 2000.

Exall Resources is a mining exploitation company, operating mainly in the field of gold digging. The Canadian group, whose total revenues amounted to 20.52 million dollars in 1999, has been posting losses over the past two years.

Oltchim last year boasted net profit standing at 33.6 billion lei (1.6 million dollars), against turnover of 4,628 billion lei (220.4 million dollars).

Exall attended Oltchim privatisation through a consortium that also comprises a Canadian company (SNC Lavalin), a British group (PVC Group), an institutional investor (International Finance Corporation – IFC) and the European Bank for Reconstruction and Development (EBRD).

The consortium claims it is planning to invest about 550 million dollars in Oltchim, of which 220 million dollars will aim at settling the debts the plant has to various banks.

Oltchim currently holds total preliminary debts amounting to 6,370 billion lei, according to the latest financial reports.

The plant has a share capital standing at 323.58 billion lei and its shares are traded at the Bucharest Stock Exchange. The stock quotation has been going down over the past years, from 6,000 lei in 1997 to 830 lei this year.