English
• The pre-emption right of the minority shareholders will be honored
Reporter: How would you comment on the decision of the European Commission to approve the conversion of the debt of "Oltchim" towards the AVAS into stock?
Cristina Chiriac: "Oltchim" has a strategic and important role in the Romanian industry and economy. On the domestic market, the company is the largest maker of chlorosodic products and chlorinated solvents and sole manufacturer of PVC, polyols-polyethers, oxo-alcohols and several other products essential for the Romanian economy, and also does design for the chemical industry.
The Romanian state has taken and will continue to take the necessary measures to increase the company's competitiveness, as we feel that this will allow us to support the economic interests of the area and of the nation's entire economy, and we can also protect society's interests when it comes to making job creation and the improvement of the quality of life of the people who live in the area.
For a better comprehension, I do feel that we need to delve into the history of this company.
Thus, we find that ever since its creation, in 1990, and until 2003, the company belonged to the State Property Fund (FPS), which later became the APAPS (2004). Between 2004 and 2006, it was comprised in the portfolio of the Office For The State's Interests and Industrial Privatization (OPSPI), and in January 2007 it returned to the AVAS, after the management of the office reverted to the AVAS. The Romanian state is currently the majority shareholder of Oltchim, in which it owns 54.8% of the company's equity - through the Ministry of the Economy - OPSPI - as well as its main creditor, through the receivable owned by the AVAS.
The equity conversion of the debt owned by the AVAS in this company and others and the related share capital increase are stipulated and reviewed by the AVAS according to Government Ordinance 117/2006, concerning the national measures state aid measures, whcih were approved, with amendments and additions through the Law no. 137/2007, as well as in compliance with the Law no. 96/2008 which amends Government Ordinance 45/2006, concerning some measures for the privatization of SC "Oltchim" SA Râmnicu Vâlcea.
In 2003, the Romanian state, through the AVAB (The Agency for the Recovery of Banking Assets), in the context of the acceleration of privatization, began the procedure for the increase of the share capital of "Oltchim", through the conversion of part of its receivable into equity, and the shares were set to be assigned to the AVAB to be sold.
The share capital increase was decided through the Extraordinary General Shareholder Meeting no. 8 of November 28th, 2003, but without granting the right of pre-emption, leading to lawsuut by the minority shareholders in court. As a result of their petition, on December 16th, 2004, the Court of Vâlcea decided to suspend the implementation of the decision to increase the share capital and, in November 2005, the same court ruled that the 2003 decision to increase the share capital was null and void.
In 2005, through the government ordinance no. 45/2006, concerning some measures for the privatization of "Oltchim", which was approved through the Law no. 30/2007, it was decided that the "AVAS would once again become a creditor of the company through the receivable converted into shares, according to the Decision no. 8/28.11.2003 of the General Shareholder Meeting... as well as proceed with the share capital increase, through the conversion into shares... of the entire receivable owned by the AVAS... while granting the right of preemption to the shareholders the company had on the date the law came into effect..."
In order to carry out these legal provisions, the Romanian state has conducted negotiations and consultations with the bodies of the European Commission, on the policies and legal provisions concerning state aids, in order to be able to conduct the conversion of the receivable into shares. This was one of the steps towards privatizing "Oltchim" and making it profitable.
Reporter: What does this decision mean for the shareholders of "Oltchim"?
Cristina Chiriac: The involvement of the state in the shareholder structure of the company, as well as in passing and implementing a batch of measures will bring stability in every regard, a stability which benefits everybody, including minority shareholders, and especially people, the employees of the company, by ensuring jobs and through the significant contribution which we can thus bring towards improving the living standard in the area. We support the company towards becoming more effective, which will propagate into the other areas of the economic and social life.
Besides, one of the obligations taken on by the Romanian state as part of the agreement of the IMF is precisely the privatization of "Oltchim". Once the receivables are converted into stock, the two authorities of the Romanian state will cooperate and will take the necessary steps, paying granting a lot of attention to the continuation of the privatization process, according to the legislation in effect.
Reporter: What is the total amount of the debt that "Oltchim" owes the AVAS, including interest?
Cristina Chiriac: Based on the assignment contract, the AVAS has taken over from the Ministry of Finance several receivables which the Romanian state had in "Oltchim". The current amount of these receivables is 538,336,540.56 lei - an amount which interest will be calculated on, starting with 2007 and going all the way until the date of the conversion.
Reporter: Please describe the conversion procedure - how will the share capital increase take place? Which shareholders will have the right to participate in the share capital increase, according to the law?
Cristina Chiriac: The procedure for the share capital increase of SC "Oltchim" SA Râmnicu Vâlcea with the equivalent value of the receivable of the AVAS against the company is of course subject to the applicable European and Romanian legislation.
Based on the EC decision, the authorities involved, namely the Ministry of the Economy (through the OPSPI) and the AVAS, will have the ability to implement the proposed measures, by summoning the General Shareholder Meeting of "Oltchim", to discuss the approval of the conversion of the receivable of AVAS into shares, while honoring the right of pre-emption of the minority shareholders.
Based on the submitted documentation and on the negotiations and the effort spent on the European Commission, the representatives of the Romanian state have faith that they will receive the agreement of the European bodies, meaning that a company as important as "Oltchim" can continue to actively expand its role in the country's economic and social life and in particular of the community where it operates.
Reporter: Thank you!
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