All Eyes on Oltchim Again
The situation of the Oltchim Ramnicu Valcea chemical works, which is on the verge of bankruptcy, is now back in the spotlight.
Leyla Cheamil, 31.01.2013, 13:29
One of Eastern Europe’s largest petrochemical works, Oltchim Ramnicu Valcea in southern Romania saw a request for insolvency approved by a Ramnicu-Valcea court on Wednesday. The ruling is not final, and may be appealed against within 7 days. The government decided to request an insolvency order because the plant has become a burden for the state, reporting losses of hundreds of millions of euros in the past few years. In 2012 the state tried to privatize the company, but the procedure fell through.
A controversial Romanian businessman won the bid for the majority stake in Oltchim at that time, but he failed to pay the pledged 45 million euros, and the government did not propose a new privatization deadline. Once the insolvency procedure is launched, the judicial management has 60 days to come up with a plan to address the situation. Here is Mircea Diaconu, a representative of the judicial management.
Mircea Diaconu: “We need to analyze the causes of the insolvency, to reach a conclusion on whether the debtor Oltchim may be rehabilitated, and to draw up a list of debts and creditors. We have 60 days after the procedure is initiated, during which we have to draw up a report.”
Under these circumstances, the future of some of the plant’s three thousand employees is uncertain. For the time being, the number of people to be made redundant as part of the insolvency procedure is unknown. Although in the past employees resorted to strikes when they did not receive their due salaries, this time around trade union leader Corneliu Cernev says this will not be the case:
Corneliu Cernev: “A restructuring and reorganization plan is to be drawn up and submitted to the Creditors Assembly for approval. We hope we will be invited to contribute to this plan.”
Oltchim Ramnicu Valcea is one of the key challenges facing the Ponta Cabinet. In fact, the members of an IMF delegation to Bucharest have warned that Oltchim is one of the most important state-owned companies where the government must take urgent measures to avoid bankruptcy. After the recent talks with the IMF, the Prime Minister said the state would like to carry on the privatization process, but with a strategic investor. At this point, however, no one can predict the future of this great plant, whose current output stands at a mere 12% of its total capacity.
