Romanian PM: If auction winner does not pay, privatization will re-start for Oltchim in six months

With the bid winner Dan Diaconescu expected to deliver the money and sign the contract for Romanian chemical producer Oltchim today (September 26 ), after delaying it from Monday, concerns are still high over whether he has the money to pay for what he pledged. The Romanian Prime Minister himself publicly expressed his doubt and started talking about the 'next' privatization of Oltchim.

“The next privatization process for Oltchim, which will be organized if the current sale contract is not signed, will be discussed with the International Monetary Fund (IMF) representative and will be given a new strategic direction,” said the PM. He suggested Romania had to organize this bid within a certain deadline to keep its word. But “The IMF did not ask us to name a winner, but rather to fulfill the needed procedures for the bid,” he said. “For the procedure at the beginning of next year, we will talk to the IMF and change the strategy,” the PM went on, already pointing out a timing for the next auction. He was a supporter of the Russian takeover idea for Oltchim, which he expressed on several occasions. The PM reminded of the interest shown by Russian company TISE, back in 2011, but the company decided not to take part in the bid in the end. In order to keep the company running until the privatization procedure is re-started, the Government will allot a loan from the future privatization revenues, to re-open Oltchim. The company is not currently functional and its employees are on strike. Oltchim does not have funding to continue work, nor pay its employees, which were awaiting a strategic investor to pay for the privatization and start work again. Romanian investor Dan Diaconescu, who owns the OTV tv station, won the bid for Oltchim with an offer of EUR 45 million. According to the PM, he will have to pay up the day the privatization contract is signed. Diaconescu confirmed he had enough resources to make the payment when submitting the offer, according to the Government, but if his statement was false, he will be taken to court, the PM warned. editor@romania-insider.com (photo source: sxc.hu)