EXCLUSIVE Oltchim has secured funding from Piraeus Bank and Banca Transilvania

The receivers of Oltchim, which has been declared insolvent on January 30th, have succeeded in securing the much sought after financing, intended to set the foundation for increasing output to a profitable level.

Lawyer Gheorghe Piperea, one of the 7directors, said: "Piraeus Bank has accepted to grant 6 million Euros to Oltchim, and Banca Transilvania has agreed to lend it 2 billion Euros. Another seven million Euros may come from CEC Bank".

In order to be profitable, the plant needs to operate at about 65% of its capacity. The necessary financing was estimated at about 20-25 million Euros.

According to data published by the receivers (Rominsolv and BDO), Oltchim had an estimated turnover of 11 million Euros in June this year, up over February when it had a turnover of 5.4 million Euros. For the current month, the receivers of the plant expect the turnover to increase by 1 million Euros over the previous month.

The predicted utilization rate of the output capacity was 21.9% in June, up over February, when the occupancy rate was 6.02%. For the current month, the usage rate of the output capabilities was estimated at 23.52%. This information was published prior to securing the financing from the banks.

Also this month, the evaluation of the assets of Oltchim will be completed, which is important for the creation of Oltchim 2, an SPV (special purpose vehicle) which will comprise the plant's viable assets, the employees, the ongoing contracts, the intellectual property rights and the invention patents. Oltchim will own 100% of Oltchim 2, which will not have any debts.

According to some recent statements of lawyer Gheorghe Piperea, the creditors will receive the money from the sale of Oltchim 2, which will only cover part of the debt: "This isn't a compromise, it is a normal effect of insolvency. The money will be paid proportionally to the creditors according to their stake. The price asked for Oltchim 2 will also need to be set according to the evaluation and to the creditors' vote".

The receivers of Oltchim claim that that the company has a portfolio of intellectual property rights (invention patents), which is alone worth a few tens of millions of Euros.

According to statements by the authorities, several investors are interested in acquiring Oltchim, including PCC (a minority shareholder in Oltchim, with a direct and indirect stake of almost 33%), the SCR group controlled by Ştefan Vuza, Socar and KazMunayGaz. Sources close to the situation have told us that the list of investors interested in acquiring Oltchim also includes Israeli investment fund "Fortissimo Capital", the Chinese that own Borsodchem Ungaria and Africa Israel Group (the owners of the AFI malls in Romania).

The Ministry of the Economy recently published the announcement for the privatization of Oltchim in the beginning of June. Since it is insolvent, the plant can be privatized as part of the reorganization plan, provided the bankruptcy judge and the creditors approve.