Oltchim management resigns as Government plans to sell majority stake

VALCEA, ROMANIA: The management of Romanian Oltchim SA (OLT) including the CEO resigned and employees staged a protest as the government prepares to sell a majority stake in the chemical company this month. Constantin Roibu, CEO, who has led Oltchim for two decades, and 16 other directors, quit, citing a ‘lack of dialouge’ with the head of the Economy Ministry’s industrial asset-sale office. Communication problems blocked financing initiatives.

About 200 employees demonstrated in front of the company because of unpaid salaries over the past two months. Prime Minister Victor Ponta said two ‘big’ investors are interested in acquiring a majority stake in Oltchim, which the company plans to sell through an auction on 18 September 2012 as part of a pledge to the International Monetary Fund. He must sell Oltchim shares and a minority stake in natural-gas grid operator Transgaz SA (TGN) this month to get IMF board approval to unlock the next tranche of its precautionary accord.

“There is no other solution for Oltchim, but to have a private investor willing to keep the jobs and secure the needed financing because the government can’t afford to pump money into the company anymore. We were concerned at one point that no company will show interest in Oltchim and now we have two big companies from two totally different geographical areas,” said Ponta. The Economy Ministry plans to sell its 188 million Oltchim shares at an indicative price of 0.1 lei ($0.02858) a share and will also offer the company debt to the state of about 1.8 billion lei ($502 million) after it failed to convert the debt into shares because of a disagreement with minority shareholders.

© Bloomberg News