PCC: "After the conversion of the claim of the AVAS, Oltchim will still owe 600 million Euros"

PCC, the minority shareholder of the Oltchim plant, has proposed the Romanian government a bigger share capital increase than the one tied to the conversion of the claim which the AVAS has against the company, which would include all of the plant's debts. Mr. Wojciech Zaremba, the representative of PCC SE in Romania, told us: "The conversion would have been useful, if it had included all of the debts of the plant. Under the current circumstances, PCC will not participate in the share capital increase proposed by the Romanian state. Why invest our money into a void? Even if the share capital gets done, the Oltchim plant will be left with over 600 million Euros in debt, it owes 200 million Euros to Electrica alone. Furthermore, the company has no working capital, its environmental obligations amount to approximately 100 million Euros, than there are the debts towards the banks, to Salrom, to the CFR. We are worried that if we participate in this share capital increase, the Romanian state will make Oltchim insolvent".

According to the calculations made by BURSA, if it does not participate in the share capital increase, PCC will be left with approximately 0.5% of the shares of Oltchim.

Recently, the notice to attend of the Extraordinary General Shareholder Meeting (AGEA) of "Oltchim", of September 10th, which has on its agenda the approval of the share capital increase of the company. Thus, the share capital will be increased from its current size of 34,321,138.3 lei, to the value of 2,093,665,917 lei, by issuing a number of 20,593,447,790 new shares, each with a face value of 0.1 lei, through the conversion into equity of the debt of 1,128,647,772 lei it owes the AVAS, granting the right of preemption to the current minority shareholders, which will have the right to subscribe a total of 930,697,007 lei, according to the number of shares owned on their registration date, the notice to attend says.

On April 30th, "PCC SE" owned 18.32% of the shares of Oltchim directly, and 14.02% indirectly, through "Nachbar Services Limited". As 930 million lei are needed to maintain the 45% quota of minority shareholders, the contribution of "PCC SE" would be approximately 662 million lei.

After the announcement of the summoning of the general shareholder meeting for the share capital increase through the conversion of the receivable of the AVAS, the management of Oltchim praised the authorities' initiative to continue with the process for the privatization of the plant. At the time, the management announced that it would fully support any potential bidder in the privatization process, within the limits of the law and of its functions, to conduct the preliminary analyses on the company, needed for the elaboration of the final offers in the privatization process.

• Yesterday, shares of Oltchim rose vertiginously

The shares of "Oltchim" Râmnicu-Vâlcea yesterday opened down 13.5%, in line with the previous three trading sessions, when investors placed orders at significantly lower prices after the announcement concerning the privatization of the plant. The stock began to quickly recoup the correction ten minutes into yesterday's trading session, and in the next 20 minutes, the quotation moved into the green. Within one hour, it had risen 15%. Shares stayed there until the close, when they were priced at 0.5985 lei. 306 trades took place, compared to just 79 in the previous three sessions. The transfers amounted to 352,000 lei, compared to 126,000 lei in the previous sessions, when the stock dropped 38.5%.