Romania’s Oltchim privatization canceled, PM announces

The bid over Romania’s state – owned chemical producer Oltchim was canceled, Romanian prime Minister Victor Ponta announced on October 1 evening. «We have to end this circus,» said the PM.

This came after a last meeting with previous bid winner Dan Diaconescu, who had brought in cash bags at the ministry to show he has the money to pay for Oltchim employees’ salaries. The Government will use its B plan for Oltchim, and try to re-start privatization in 2013. A new GM and a new managerial team will be named and the company will re-start production, said the PM.

The contract should have been signed in ten days, meaning by October 1, and the winner should have paid EUR 45 million, and not money to cover salaries, the PM explained, quoting the agreement signed by Diaconescu upon winning the company. The investor should have submitted a business plan within this timeframe, but he did not do that either. A managerial team should also have been presented.

Romania was hoping to sell Oltchim to a strategic Russian investor, but only two Romanian bidders and the minority Oltchim shareholder PCC showed up at the auction.

Adapted from Romania-insider