Romanian government to fund Oltchim’s acquisition of Petrom assets

The Romanian government plans to aid the funding of Oltchim’s acquisition of Petrom's petrochemicals plant by next month. Oltchim was in talks with several banks for a €70 million (US$100 mln) loan to fund the acquisition, which it was finding difficult to get as the company is debt-laden at the time of a global cash squeeze that has also affected demand. However, Romanian Prime Minister has assured that the government will lend a hand to the ailing company and give state guarantees for €50 mln. With this, the acquisition is estimated to be completed by the beginning of August. The government plans to guarantee 80% of Oltchim's long-term investment plans of €400 mln and may also consider transferring its debt into the portfolio of the state's privatisation agency AVAS.
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