Friday 8 April 2016

EU probes debt write-off for Romanian petrochemical firm

EU probes debt write-off for Romanian petrochemical firm

The European Commission has launched an in-depth investigation into Romania's support for a petrochemical company.

It will verify whether debt write-offs by Romania and continued supplies by state-owned enterprises in favour of Oltchim, despite the firm’s deteriorating financial situation, were in line with EU state aid rules.

Oltchim is one of the largest petrochemical companies in South East Europe, with the Romanian State owing a 54.8% stake.

The Commission stated the company was declared insolvent in January 2013 and since then it has been in the process of reorganisation, with the aim of paying past debts from the proceeds of a future privatisation.

It will examine the debts owed to the Romanian Authority on managing state assets (AAAS), debt cancelled by AAAS and other state-owned firms as well as the continuing provision of electricity, steam and saline solutions to Oltchim.

Commissioner Margrethe Vestager, in charge of competition policy, said: "Following the economic difficulties of Oltchim and the cancellation of public debts owed by the company, we need to verify whether a private creditor would have accepted to act in the same way. Thanks to its recent reorganisation, Oltchim's financial situation has improved and Romania hopes to find a new investor.

"Our aim is to facilitate a sustainable future for the economic activities of the company without the need for further government support."

Written by

Bruna Pinhoni

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