Minority shareholders of "Oltchim" sit down for negotiations

• Wojciech Zaremba, PCC SE: "We are looking for a way to cooperate with Carlson Private Equity"

After significantly raising their stake in "Oltchim" Râmnicu Vâlcea (OLT), taking it up to about 17% following their buying over the last few weeks, the Poles of PCC SE have announced that they have begun talks with the representatives of "Carlson Ventures", the other significant shareholder of the plant, as they are interested in finding a way of working together.

Wojciech Zaremba, the representative of PCC SE for Romania, diplomatically avoided mentioning what the cooperation between his company and investment fund "Carlson Private Equity" would consist of, saying only that acquiring the stake of the British was not the subject of the discussions concerning "Oltchim".

"Carlson Private Equity", which specializes in investments in distressed companies, has increased its stake in the plant to 14%, over the past few weeks. Stock market analysts feel that the fight between PCC SE and the British to acquire shares in OLT caused it to surge over 862% since the beginning of 2011. PCC SE and "Carlson Private Equity" currently hold about 31% of the shares of the plant. Stock market legislation states that shareholders of a company acting in concert are required to launch a tender offer when reaching the holding threshold of 33%. The officials of the two companies previously said that they were not acting in concert.

"We have begun talks with the people of Carlson Ventures to see their intentions when it comes to Oltchim", said Wojciech Zaremba, who added: "We have some time ago said that we are interested in cooperating with all the shareholders. Now we simply want to understand what the people of Carlson Ventures want. We will see what happens after that.

We haven"t considered the acquisition of the stake that Carlson has in Oltchim, this topic is not on the agenda. However, we are looking for a possibility to cooperate when it comes to Oltchim".

Artur Jedrzejewski, managing partner la "Carlson Private Equity", said as early as at the end of last month that he has been contacted by the officials of PCC SE for a meeting. The head of "Carlson Private Equity" said at the time that the price of shares of OLT has risen enough and that he would be willing to sell the fund"s stake in "Oltchim" "even tomorrow, if a buyer were to appear".

• PCC SE: "The price of the stock of OLT has never been this high"

Since the end of May, when Artur Jedrzejewski estimated that the price reached high enough, shares of "Oltchim" rose about 9%, reaching a high of 2.325 lei/share, on June 9th. Yesterday, the shares of OLT were trading between 1.85 lei and 1.96 lei/share. The Poles of PCC SE have been buying shares in OLT almost every trading session over the last four weeks, spending about four million Euros, with their interest influencing the price of the stock. Some voices in the market suggest that the rise of the stock could have a decisive influence on the price for the privatization of the plant, as the Romanian state won"t be allowed to sell the company at a price below the one on the stock market. Therefore, it is hard to tell how many takers there would be, outside PCC, willing to participate in the privatization of a company with a market capitalization of 627.04 million lei and debts coming due in less than a year of 1.28 billion lei, according to the Q1 2011 financial statements.

"Shares of OLT have never traded at 2 lei/share", Wojciech Zaremba said triumphantly, and stressed that no one would be able to accuse PCC SE of wanting to buy "Oltchim" for loose change.

"The evolution of the price of the Oltchim"s stock is influenced by three factors", the representative of PCC SE in Romania said. He went on to say: "First of all, the government has announced the privatization of the company. Second of all, we have a new player - Carlson Private Equity - which no one expected. Third, the evolution of the stock of OLT is typical for what happens when brokers and investors find that someone is interested in the stock of a specific company".

"Oltchim" has significantly reduced its losses YOY, from 52.8 million lei in Q1 2010, to 2.64 million lei in Q1 2011, and is now functioning at 40-45% of its capacity, as opposed to 20% in Q1 2010.

The plant has announced that it intends to sell its 30% stake of "Protectchim" Râmnicu Vâlcea in an auction starting at 1.71 million lei plus VAT, as well as its 25% stake in "Mentchim", in an auction with a starting price of 375,000 lei plus VAT.