Romanian state-owned chemical plant Oltchim (OLT.RO) will take over the petrochemical arm of Arpechim refinery by the end of August, in a EUR62 million transaction, which doesn't include Oltchim's debts to the refinery's owner, oil company Petrom (SNP.RO), news agency Mediafax reported.
Oltchim's deputy general manager Radu Olaru Thursday said the deal value is EUR62 million, an amount that doesn't include Oltchim's debts towards Petrom, worth EUR28 million.
"The sum includes the effective amount to be paid, working capital and funds for equipments overhaul," Olaru told Mediafax.
He also said Oltchim is in talks with several banks for a loan to finance the acquisition and that it would negotiate the debts rescheduling with Petrom.
Olaru estimates the transaction will be completed by end-August.
Economy Minister Adriean Videanu also said Thursday that the transaction would be completed by the end of August, after Oltchim gets the guarantee from Eximbank for the loan to be taken for buying the assets.
Oltchim has previously announced its intention to borrow EUR70 million to take over Arpechim's petrochemical activity, and has asked state-owned lender Eximbank for a EUR49 million guarantee.
Arpechim is the main raw materials supplier of Oltchim, whose activity was considerably reduced after Petrom decided to cease petrochemicals production.
Oltchim has been trying for the past two years to buy the petrochemical assets from Petrom, but had no money to seal the deal.
Petrom, which is majority owned by Austria's OMV (OMV.VI), has two refineries in Romania, namely Petrobrazi and Arpechim, with a total annual refining output of eight million tons of oil, or 40% of the country's total processing capability.
Petrom aims to sell the petrochemical activity at Arpechim, seen as a non-core business for the oil company.
After talks with Oltchim's management Thursday, Romanian Prime Minister Emil Boc announced several measures to support the plant.
Thus, the government will guarantee 80% of the EUR500 million in loans that will be taken by Oltchim for investments, and will start the procedure to convert into shares the plant's debts toward the country's privatization authority AVAS, worth around EUR120 million.
Oltchim is majority owned by the Economy Ministry, with a 54.79% stake.
At around 1256 GMT, Oltchim and Petrom shares were trading flat on the day, at RON0.3 and RON0.235, respectively. Bucharest bourse's main index BET was up 0.37%.