Fresh attempts to privatize insolvent Romanian PVC producer Oltchim have met with new obstacles as the European Union questioned the Romanian government’s handling of the sell-off process.
In the latest twist in this long running saga, the EU Commission suggested the government has treated the indebted chemical company too favorably. It questioned the state’s failure to enforce its rights as an Oltchim creditor.
More than 70 percent of Oltchim’s products are sold outside Romania.
In addition, commissioners have criticized a deal being negotiated for Oltchim to acquire the Arpechim refinery, mothballed two years ago, from private company Petrom. It is owned by Austria’s OMV group.
Râmnicu Valcea-based Oltchim already owns the former Arpechim petrochemicals operation, but the Commission claims taking the old refinery off Petrom’s hands will release Petrom from “costly obligations” in the plant’s subsequent decommissioning. These include the task of decontaminating the refinery site.
The Pitesti-based refinery was formerly Oltchim’s main feedstock supplier and the government promised to buy it to include in the Oltchim privatization package. That, it believes, will make a sale more attractive to potential Oltchim purchasers.
The sale of the loss-making state chemical company has been postponed numerous times since it was declared insolvent in January 2013. The privatization is now being promised for this December.
The EU misgivings over the Oltchim sale were recently reported in Romania by the country’s Competition Commission chairman Bogdan Chiritoiu. In the privatization process, he said, the EU wanted to know why the state does not act like any private investor in its role as an Oltchim creditor.
“The [EU] Commission asked for an explanation as to why, as Oltchim is in debt to the state, the state does not enforce it like any other creditor would; this raises questions about possible state aid,” the official told Romania’s Agerpres news portal.