Over 90% Oltchim Shares Will Be Blocked

The trading of 90,87% Oltchim Ramnicu Valcea shares (BSE - OLT) will be blocked for two weeks as of today, due to an Ordinance of CNVM (National Securities Commission) issued on April 5th.

The blocked shares were issued following the EGM decision (November 28th 2003) to increase the company"s share capital and they are held by the Authority for State Assets Recovery (AVAS). The commission made this decision in order to protect owners and buyers, as the new company features, established by the Valcea Court on November 17th 2005, were not registered in the Valcea Commerce registry (ORC), CNVM and capital market institutions.

In November 2003, the General Meeting of shareholders in Oltchim decided the conversion to shares of a 95,2 million USD debt to the state. Following the share capital increase, the Ministry of Economy and Trade increased its holding in the company from 53,2% to 95,7%. The decision was contested by Lindsell Enterprises, a minority shareholder, as its holding would decrease from 10% to 1%. The court ruled in favor of the latter at the end of 2005 and decided to cancel the issue of additional shares corresponding with the debt to shares conversion.

However, the new shareholder structure after the share cancellation was not registered in the Commerce Registry, but maintained. Thus, AVAS appears to still hold 95,7% in the company. The prolonged litigation with minority shareholders postponed the privatisation of Oltchim, one of the largest state-owned companies in Romania.