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Oltchim winner makes new demands before signing

By Richard Higgs
Posted 28 September 2012

The Romanian entrepreneur who won the bidding to acquire the country’s ailing Oltchim plastics and chemical company has made new demands of the government before he signs the contract.

TV mogul and politician Dan Diaconescu, who bid €45m for the state’s 54.8% stake in Oltchim last week, is said to want the government to pay first all unpaid salaries of the Oltchim workforce.

He is also demanding the administration come up with a way for Râmnicu-Valcea-based   Oltchim to acquire a national raw material supplier Arpechim, a refinery business now mothballed by Romanian oil and gas company OMV Petrom.

In addition, Diaconescu insisted the government guarantee that no state creditors will ask for Oltchim’s insolvency after its takeover, reported Romania’s Romania-insider.ro online news service.

There is widespread speculation that the entrepreneur, who is said to have had a meeting at the US embassy in Bucharest and returned this week from flying visits to Munich and Vienna, may have met with a potential investor willing to back the Oltchim takeover. 

National media has variously suggested he might not have the money to support his €45m offer or as leader of his own political party, is simply seeking media attention just before autumn elections.

Earlier this week, after winning last week’s auction among bidders for Oltchim,  Diaconescu had refused to sign the sale contract with the government’s Office of State Ownership and Privatization in Industry (OPSPI) claiming it differed  from a previously issued sale document.

The delay completing the sale of the heavily indebted chemical company, a PVC producer, has infuriated Romania’s Prime Minister Victor Ponta. He has given the winning bidder until next Monday (1/10) to come up with the bid money or the government will relaunch the privatization process.

Before inviting new bids, Ponta wants to get Oltchim up and running again following its shutdown due to a cash shortage. He said a new management team should be put in at Oltchim after senior managers there resigned, and a special administrator should be appointed to oversee the business.

The government could provide Oltchim with financial aid drawn from a state fund intended to rescue and restructure ailing companies to pay unpaid salaries by November. PM Ponta said his government would reopen the privatization process early next year after consulting the International Monetary Fund (IMF). It has been pressing Romania to privatise state firms including Oltchim.

Romania’s government is said to want to find a major corporate investor, preferably a big Russian energy group, to buy Oltchim. Ponta was reported to have suggested an earlier bidder, Russia’s TISE chemical investment group, which showed interest in April, may be willing to bid in a new auction. 

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