ThE COUNTDOWN HAS BEGUN The interest payments cause the outstanding debt of "Oltchim" towards the AVAS to double

• Six months for the share capital increase of the plant of Vâlcea

• Constantin Roibu was not dismissed

The receivable of "Oltchim" against the AVAS will also include the interest pertaining to the 2007-2011 period, after the shareholders of "Oltchim" (OLT) yesterday approved the private law agreement concluded in that regard on December 22nd, 2011.

The approval of the convention depends on the signing of an addendum to it, which would mention the interest calculated for the period elapsed since January 1st, 2012, as well as a resolutory condition according to which the document will become null and void within six months from the publication of the Extraordinary General Shareholder Meeting the debt to equity conversion doesn't take place.

The interest calculated until April 23rd, 2012, which are supposed t be included in the amount of the receivable of the AVAS, amount to 533.77 million lei. To this the debt of 538.33 million lei will be added, a debt which will be converted into stock, as part of the procedure to increase the plant's share capital.

On March 7th, after almost four years of investigation, the European Commission approved the conversion into stock of the debt of the chemical plant of "Oltchim" by the AVAS (ed. note: the Authority for the Recovery of State Assets Recovery).

Minority shareholder PCC SE, known for its open warfare against the management of "Oltchim", has proposed the presentation of a report concerning the current status of the negotiations between "Oltchim" and the AVAS, according to the decisions made by the shareholders on August 30th, 2011.

The management of the company answered that the interest was calculated according to the algorithm communicated by the European experts.

In their meeting of August last year, the shareholders of OLT approved, on principle, the signing of a convention with the Authority for State Assets Recovery (AVAS), by which the Company accepted the charging of interest on the receivable of the AVAS, between January 1st, 2007 and until the date of the conversion, provided two prior conditions were met: the coming into effect of a law which would allow such a conversion and the prior notification of the European Commission about the decision.

At that time, the shareholders decided that the actual conversion terms would be negotiated by the management of "Oltchim", with its creditor, the AVAS, and the project would subsequently be submitted to the General Shareholder Meeting for approval.

The Board of Directors of "Oltchim" was empowered by shareholders to negotiate with the AVAS the conversion into stock of the plant's debt.

Yesterday, the General Shareholder Meeting rejected the request of "PCC SE" that the management of "Oltchim" would conduct, through a specialized company, an economic analysis that would find the market value of the receivable of the AVAS.

• The dismissal of Roibu was rejected

"PCC SE" has also asked for the dismissal of Constantin Roibu from his position of CEO of "Oltchim", since "under the management of Mr. Roibu, the situation of the plant has constantly deteriorated". This item was rejected by the shareholders.

"PCC SE" owns 17.47% of the shares of the plant of Vâlcea. The Romanian government, through the Ministry of the Economy, owns 54.8% of the shares of the OLT, and investment fund "Carlson Ventures", registered in Great Britain, owns 14.02% of the shares, through Nachbar Services.

The management of "Oltchim" says that the optimal alternative to allow the plant to operate at full capacity, would be the conversion of the receivable of the AVAS into stock, the acquisition of the Arpechim Piteşti refinery and running it in an integrated manner with the petrochemical operation of Piteşti and the petrochemical activity on the industrial platform of Râmnicu Vâlcea. This alternative is also supported by CEO Constantin Roibu. According to a report by the company, integrated operation would make the company profitable starting in 2015, and result in a forecasted growth of 169%, in 2013, to one billion Euros.

According to the agreement signed with the IMF, "Oltchim" is one of the eight companies which the government intends to privatize this year.

Four potential investors (Pegamont Ploieşti - Romania, PCC SE - Germany, AISA Invest - Romania and JSC TISE - Russia) have submitted preliminary non-binding offers for the privatization of Oltchim.

The privatization method is combined: negotiation based on preliminary and non-binding offers, followed by a call for bids with a sealed envelope bid.