The privatization of "Oltchim" is the hardest after that of "Sidex" Galaţi, several analysts in the market consider. Some of them think it will take a maximum of flexibility from the state to solve deal with this affair.
The plant has been operating at low capacity and owes over 700 million Euros to the AVAS, Electrica and banks. Under these circumstances, complying with the deadline set by the IMF for privatization (ed. note: September 26th) could be the only chance of saving "Oltchim".
Before the privatization, the "Sidex" Galaţi steel plant was close to bankruptcy, having accrued huge arrears to its suppliers, unable to raise financing and being leeched in every possible way, according to a report made in 2008 by Radu Sârbu, called "The Odyssey of the privatization of < < Sidex > > (see INSERT). According to the quoted article, the bankruptcy of the plant would have caused the collapse of BCR, which - at the time - would have led to the crash of the Romanian economy.
At "Oltchim", the government completely changed the privatization strategy at the last minute, even though the plant had already summoned the shareholders to approve the conversion of the debt towards the AVAS into equity.
In last Thursday's session, the government abandoned the conversion procedure and instead for the collective sale of the block of shares it owns in "Oltchim", representing 54.8% of the share capital and of the receivables of the AVAS and "Electrica" SA, amounting to 1.8 billion lei, in other words 56% of the total debts of the company.
This approach could be a proof of flexibility from the state, but some are suspicious that this new strategy is intended as a favor for a cherry-picked investor.
* Cristian Duţescu: The conversion wasn't to anybody's advantage
Lawyer Cristian Duţescu considers that, in the way it was proposed, the conversion
