The price of "Oltchim" jumps 15% again

• Mihai Chişu, "IFB Finwest": "This is the hand of investors that know what they"re doing"

• The liquidation of the company, mentioned as an alternative in the draft of the Letter of Intent addressed to the IMF

The shares of "Oltchim" gained 15% yesterday, in the first hours since the opening of the trading session, to the surprise of many investors and brokers, as the conditions of the draft of the Letter of Intent of the IMF published yesterday mentioned the possibility of the company entering liquidation unless it was privatized successfully by the end of this year. The government had previously announced that "Oltchim" might be put up for privatization in the second half of 2012, as postponing the sale by almost half a year seeming unrealistic.

Mihai Chişu, a broker with "IFB Finwest", considers that the 15% gain in the price of OLT recorded yesterday, came on the back of transactions of a relatively low number of investors who acted in a similar manner on other occasions since the beginning of the year. He said: "What is happening in Oltchim eludes the regular investor. I think that this is the hand of investors who know what they"re doing, the appreciation didn"t come on the back of a market movement. Either there are some people who strongly believe that the privatization of the company will bring major profits to those who own its stock, or they were influenced by the note of optimism brought about by the small but decided steps that the plant has taken recently towards restarting and operating in integration with the petrochemical division of Arpechim".

On Tuesday night, the management of "Oltchim" announced that the company acquired the installation for producing oxygen-nitrogen and the afferent plot of land of the petrochemical platform of Arpechim Piteşti, for an amount of 1.6 million lei.

Constantin Roibu, the general manager of the plant, said that the acquisition of the installation is part of the process for integrating Oltchim with the petrochemical installations of the platform of Piteşti.

The restarting of the petrochemical division of Arpechim is scheduled to take place in June, but Constantin Roibu recently said that, it is likely that only some of the installations will be restarted at first.

According to the draft of the Letter of Intent addressed to the IMF, within a few months, the government will propose a solution to the large debts of "Oltchim", and is set to appoint a legal consultant by the end of June, for the privatization of the company through a strategic investor, and an investment bank for privatization by the end of September. If privatization isn"t successful by the end of the year, the company will enter liquidation, the abovementioned document states.

Constantin Roibu, the general manager of "Oltchim", praised the Government"s decision to keep the company on the list of companies to be privatized and expressed his hope that the future management will keep in mind the strategic importance of the plant on the market for petrochemical products.

Last week, the company announced that it has significantly reduced its losses from 52.8 million lei in the similar period of 2010, to 2.64 million lei, and is now working at 40-45% of its capacity, compared to 20% in the first quarter of 2010.

Shares of "Oltchim" have gained about 150% over the course of the past five months, which makes them this year"s most profitable investment.