Romania’s Oltchim May Be Split Up to Pay Debt, Prepare Sale

Oltchim SA (OLT), Romania’s state-owned insolvent chemical company, may be split in two to pay off its debt and attract interest before a majority stake is sold to meet pledges under an international loan accord.

Oltchim’s viable assets may be transferred to a special- purpose vehicle and the remainder may be liquidated to help pay off part of debts totaling about 800 million euros ($1 billion) under a reorganization plan, legal administrator Gheorghe Piperea told reporters in Bucharest today.

“The company is now operational to ensure its survival and give us time to prepare its reorganization, which in turn is only meant to prepare its privatization,” Piperea said.

The Romanian government, which failed to sell Oltchim last year to politician Dan Diaconescu, should try to sell its majority in the company to a strategic investor from the chemical or petrochemical industry, Piperea said. The administration pledged to sell it part of a precautionary accord with the International Monetary Fund and the European Union to unburden the state budget.

The company’s reorganization plan will be completed after the creditors’ meeting in mid-April, Economy Minister Varujan Vosganian told reporters today at the joint conference with Oltchim’s legal administrators.

To contact the reporter on this story: Irina Savu in Bucharest at isavu@bloomberg.net.

To contact the editor responsible for this story: James M. Gomez at jagomez@bloomberg.net