The chemical factory Oltchim Ramnicu Valcea will restart production at 60-65 percent capacity next week, while the management will attempt to negotiate a sliding scale debt and a contract for electricity supply, according to reports in the Romanian media. There are also plans for EUR 20 million in emergency government aid, according to Secretary of State for Economy Traicu Rodin, who said the proposal will be discussed with the European Commission's Directorate-General for Competition in Brussels.

Oltchim spokesman Ion Coclet said at the Board meeting on Monday the management decided on extreme measures to relaunch Oltchim production, including a recovery plan and strategy for the short and medium term.

Daniel Chitoiu from the Ministry of Economy announced that all Oltchim employees would receive their salaries at the end of this week. He added that meetings will be held with the European Commission for allocation of an amount to continue the production and also discussions with the big creditor banks to provide half of working capital Oltchim needs.

At the end of May, Oltchim recorded debts of RON2.59 billion (EUR 581 million).  In addition, Oltchim owes debts on loans to many of the banks operating in Romania; EUR 72 million to BCR, EUR 35 million to Banca Transilvania, EUR 4 million to Unicredit, EUR 11.5 million to CEC, EUR 3 million at ING, EUR 2.5 million Bancpost and a total of EUR 2 million to Rabobank, Garanti Bank, Alpha Bank.

The Government tried to privatize the producer earlier in September, but the privatization failed after a media scandal involving investor and media owner Dan Diaconescu. The privatization process will be re-started in spring 2013.

Ioana Toader, ioana.toader@romania-insider.com