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Southeast Europe
December 14, 2018 www.intellinews.com I Page 17
Chimcomplex starts building regional chemicals giant with Oltchim takeover
Iulian Ernst in Bucharest
Romanian chemical company Oltchim, which
is currently under insolvency procedures, an- nounced on December 10 that it has completed the procedures to sell the largest part of its op- erating assets to Chimcomplex Borzesti, the sole bidder for the assets.
State-controlled Oltchim became insolvent in 2013 and several privatisation attempts have failed since then. The deal with Chimcomplex, controlled by local investor Stefan Vuza, may now mark the emergence of a strong regional player. The main opportunity is the strong domestic demand, as shown by Romania's large imports of chemical products. The threats are related to the need to consolidate two entities with visibly differ- ent cultures, but Vuza has strengthened the man- agement by bringing experts with international exposure into his team for the first time.
One year after the creditors agreed on the deal with Chimcomplex, completion of the sale of the largest part of Oltchim finally puts an end to the five-year saga of failed privatisation and a fierce struggle for recovery.
Oltchim creditors approved the sale of asset bun- dles to Chimcomplex in December 2017. A small- er bundle of assets was sold to another buyer: fellow local investor Dynamic Selling Group (DSG) agreed to pay €1.9mn for the construction materi- als division of Oltchim. Oltchim’s non-operating assets are still for sale.
In June, the European Commission endorsed the deal and in November Romania’s Competition Council approved the deal as well. Out of the 2,200
Chimcomplex (pictured) and Oltchim have very similar industrial profiles but the two had different destinies after the fall of communism.
employees at Oltchim, 1,164 have agreed to sign labour contracts with Chimcomplex.
The last step of the process was the payment of the €127mn by the buyer. Chimcomplex also pledged to invest €70mn for the environmental cleansing of the production site.
Chimcomplex struggled to get financing for the deal, which will remain important in the future. The buyer initially disclosed it had secured the support of a broad range of partners including
US based Tricon Energy as a trading partner, five European banks co-ordinated by ING Bank N.V. as financing partners and two investment funds, Amerocap and ADM Capital. Four other business partners, two in Romania and the other two in Italy and Turkey, were mentioned by Chimcomplex officials at the time they submitted the bid in July 2017. But eventually, as reported by G4media, it managed to attract financing from Russia’s VTB Europe, a subsidiary of Russian bank VTB head- quartered in Frankfurt, which reportedly put up the largest share of the financing, and Credit Suisse, which was highly important for repetition- al reasons.
Oltchim's creditors will get back only part of their money after the sale of the operating assets. The market value of Oltchim's assets on sale was evaluated in July 2017 at €294mn and the start- ing price in the auction for all its assets was set at €307mn. The debt owed by Oltchim to its creditors is RON3.45bn (€800mn), out of which RON900mn is guaranteed, RON1.28bn is to go to state budg- ets and RON1.25bn is non-guaranteed debt. Out of the recipients of guaranteed debt, the larg-