CRISTINA CHIRIAC: "Since 2007, privatization with a strategic investor is no longer possible"

• Interview with Mrs. Cristina Chiriac, former vice-president of the AVAS

Reporter: What do you think are the odds of the privatization of "Oltchim" being successful?

Cristina Chiriac: First of all I would like to emphasize the importance of "Oltchim", both economically, as well as strategically.

On a local level, "Oltchim" is the largest provider of jobs, representing the biggest taxpayer contributing to the local and the state budget.

3,400 people financially depend on the fate of the company, to say nothing of the small enterprises which have developed locally and, by shutting down/suspending the activity of Oltchim they are directly affected.

From my point of view, it is vital for Oltchim to resume operation. As for the odds of the successful privatization of Oltchim, I am skeptical.

Reporter: What is your opinion on the privatization method selected by the OPSPI for the sale of the plant?

Cristina Chiriac: As a result of the adhesion and the accession of Romania in the EU, the specific legislation concerning privatization has suffered a series of essential modifications.

I will give you just one simple example: privatizations with a strategic buyer such as "Ford", are no longer possible.

Thus, we can speak today about privatization contracts with competitive terms, without restricting the buyer in any way, without being able to impose development strategies, investments or social protection etc.

From my point of view, I think that the Ministry of the Economy, through the OPSPI, should have continued with the actions to increase the share capital by incorporating the receivable of the AVAS and converting it into stock, especially after having worked for four years to gain the permission to do that from the European Union.

Personally, I feel that by abandoning these actions, the Romanian state is in fact abandoning the share capital of the company!

Reporter: There are some analysts claiming that it would be insanity for any investor to buy Oltchim. What is your opinion?

Cristina Chiriac: The leverage ratio of "Oltchim" is very high, it's true. But I feel that through an adequate management and a restructuring program, perhaps through a capital injection, the things can change even in conditions of economic crisis.

From my point of view, today's winners are the entrepreneurs from 20 years ago, the ones who had courage.

The difference between analysts and entrepreneurs consists only in the size of their courage. There is a risk in everything we do, some people think too much about it and give up, and here we have the people who belong to the first category, others persevere, they show courage, and they are the ones who belong to the second category.

Reporter: There are rumors that the state will fail to privatize Oltchim and that it will declare it insolvent. How would you comment?

Cristina Chiriac: Like I said, I am skeptical about the success of the privatization of "Oltchim", but I do not feel that the insolvency is a solution. There are better ways!

Reporter: Given the fact that the state has abandoned the idea of converting the debt of Oltchim towards the AVAS into stock, is there any risk of the European organisms sanctioning Romania?

Cristina Chiriac: No.

Reporter: Was it worth it for the Romanian state to abandon this conversion, given the efforts which it has made so far? What are the representation costs for this conversion (lawyers, lobby-ists etc.)?

Cristina Chiriac: I think that it is a big mistake that the Romanian state has abandoned the debt-to-equity conversion. When it comes to the representation costs, they can of course be quantified by the management of Oltchim, but I assure you that these costs would have been insignificant if this debt-to-equity conversion had been made.

I believe in an economy based on industry, and "Oltchim" is a too important vector to be abandoned so easily!