Oltchim SA offers to acquire Arpechim refinery to increase appeal before selling its stake

28-May-11

Oltchim SA has made an offer to buy OMV Petrom SA (SNP)’s Arpechim refinery as Romania attempts to increase the company’s appeal before selling its stake in the PVC maker, as per Bloomberg. Oltchim is seeking to get cheaper raw materials for its petrochemical operations and boost investors’ interest in the chemical company before its privatization, as per the Chief Executive Officer. The company aims to conclude the deal before the government sells its majority stake in loss-making Oltchim by the end of the year. Petrom, Romania’s largest oil and gas company, said in March that it will permanently close Arpechim and convert the site into a crude oil and fuel storage facility after it failed to find a buyer for the outdated refinery. Oltchim already bought Petrom’s petrochemical assets at the Arpechim refinery last year for 13 mln euros (US$19 mln) and an undisclosed amount of debt restructuring. Oltchim, which is based in Ramnicu-Valcea in southern Romania and has reported annual losses since 2007, would reduce raw materials costs by as much as 35 million euros a year after the refinery purchase, according to the CEO. Romania is trying to sell its 55% stake in Oltchim by the end of this year, as it aims to cut costs with unprofitable companies to meet budget pledges to the International Monetary Fund and the European Union. This would be a fully integrated company, more interesting for investors wanting to buy the government’s majority stake.”