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 Monday 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.

The Economy Ministry will go to court against Dan Diaconescu for using false documents and for lying to public institutions.

The letter from the Dutch citizen who pledged to have the EUR 45 million was fake, the person did not have an account with that Dutch bank, said the PM. He was found to live in Spain and to be a book writer.

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.

In the future auction, the state will make sure to avoid allowing investors like Diaconescu to take part in the bid, said the PM.

Romanian investor Dan Diaconescu, politician and owner of OTV tv station and had won the bid for Oltchim, with an offer of EUR 45 million for the majority of shares in the company. After winning, the investor complained of mistakes in the contract, as well as the inappropriate behavior of those who attended the negotiations. Remus Vulpescu, the head of Office of State Ownership and Privatization in Industry (OPSPI), allegedly opened his laptop and asked the participants what sort of music they want to listen to, and played some songs, including by rock legends AC/DC.

The Government gave the investor October 1 as the deadline to bring the money for Oltchim, even though the task book gave 2013 as the deadline to pay, said Diaconescu.

Diaconescu’s win in the privatization of Oltchim has triggered debate in the media, and even comments from high level politicians, as many fear he does not have the money to take over the producer. The businessman, owner of OTV television station and also head of the political party Partidul Poporului Dan Diaconescu, offered RON 203 million for Oltchim – some EUR 45 million. He won 54.8 percent in Oltchim.

Romania’s Government approved earlier in August the privatization strategy for Oltchim Ramnicu Valcea, where the state will sell the 54.8 percent package it owns in the company, as well as the debt package held by AVAS.

To be updated

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