Privatisations in Romania have acquired something of a reputation for controversy and confusion. The latest, the urgent sale of chemicals maker Oltchim, has all the hallmarks: a loss-making state enterprise, international pressure for a rapid deal, a controversial tycoon (pictured), maladroit government handling of the case, and now serious doubts about the company’s future.
As of early Monday, Oltchim’s fate hung in the balance.

The firm, €700m in the red, is being sold off as part of a package of privatisations proposed by the IMF, which is supporting the Romanian economy.
On September 21, journalist-turned media magnate Dan Diaconescu won the auction for the government’s 54.8 per cent stake in Oltchim, one of South East Europe’s biggest chemicals manufacturers. The dashing Diaconescu – owner of the television station OTV – bid an eyebrow-raising 203m lei (around€45m). This trumped the other offers from bidders with manufacturing backgrounds – German chemical company PCC SE, already a minority shareholder, and Romanian industrialist Stefan Vuza.
For many in Romania, Diaconescu’s lack of industrial experience, and his political ambitions, made his bid intriguing. The story took a dramatic twist when, days after the auction, prime minister Victor Ponta declared that Diaconescu did not have the money to pay for Oltchim.
If Diaconescu could not deliver, the tender would have to be re-opened in a few months’ time – during which the state would almost certainly have to extend an emergency loan to the troubled company, which stopped production in August due to the weight of its debts and is currently the subject of industrial action by its workers.

 

Financial Times