The government starts the procedures for the privatization of "Oltchim"

• Constantin Roibu: "It is important that Oltchim doesn"t get sold to a competitor"

The Ministry of the Economy, the majority shareholder of "Oltchim" Râmnicu Vâlcea (OLT), yesterday announced that the government has begun the procedures for the privatization of Oltchim, and the consulting services for the sale of the company will be paid for this year.

The press release of the Ministry of the Economy mentions the fact that "Oltchim" will be put up for sale in the first half of 2012, according to a draft letter of intent drawn up following the discussions between the representatives of the government and the representatives of the joint mission of the International Monetary Fund, the World Bank and the European Commission.

Constantin Roibu, the president-managing director of the plant, said that, in his opinion, the privatization of "Oltchim" may happen in the second half of 2012, using the method suggested by the yet-to-be appointed consultant. Mr. Roibu said that he is a supporter of privatization and that it is important that the company be sold to an investor that would be interested in developing "the last petrochemical plant in Romania". Constantin Roibu said: "I think it is very important the company be sold to an investor that is interested in the good of the company and that wouldn"t be a competitor to Oltchim".

"I am a supporter of the privatization, I was not consulted by the Ministry of the Economy, when it comes to the sale of the company, perhaps I didn"t even have to be because I am a simple employee. It is important that the investor that will participate in the privatization develop Oltchim because it is the last petrochemical plant in Romania".

Information on a potential privatization of the plant of Vâlcea, which was included in the monitoring list of the IMF, was published as early as a week ago, but the Ministry of the Economy officially announced that it has taken the necessary steps to sell the plant. Meanwhile, interest in the shares of "Oltchim" (OLT) increased, as price rose 15% last Thursday, on a volume of 1.72 million shares, significantly higher than usual. Even though there were rumors that the petrochemical division of "Arpechim" could be restarted this month, the sudden rise of the shares of Oltchim on Thursday occurred even though the company had not posted any news, which made some brokers wonder about the reasons behind the move and warn that perhaps some of those trading knew had information that wasn"t yet public. Shares of Oltchim (OLT) gained 5.44% yesterday, to 0.25 lei/share, with 697,000 shares being exchanged in 101 trades.

Wojciech Zaremba, the development director of PCC SE, who owns about 13% of "Oltchim" was the only insider who was reported as a buyer lately, after he bought 500 shares last Friday, at a price of 0.245 lei/share.

The government. which currently owns 54% of Oltchim, repeatedly announced that it was preparing the privatization of the company. One of the reasons that the company has not yet been privatized is the fact that the company accrued debts for years on end, , which caused Adriean Videanu, the former minister of the Economy, to say last year that "Oltchim" would only be privatized after it becomes profitable, because the state is at risk of earning nothing by selling the company, as long as its own capital is negative.

Another plan of the government is to create a petrochemical chain which would include "Rafo" Oneşti, "Oltchim" and "Arpechim", an idea which was mentioned in 2009 by the current prime minister.

"Oltchim" has a market capitalization of 85.75 million lei, based on the price of 0.25 lei share recorded in yesterday"s trading session. The company posted losses of 178.19 million lei at the end of Q3 2010. The company"s debts amounted to 2.19 billion lei, at the end of September 2010.