The conflict between the state, the majority shareholder in the Oltchim Ramnicu Valcea chemical complex and its minority shareholders, was re-ignited again this Monday, after the company asked the shareholder registry to register the capital increase that was approved in 2003 but opposed by minority shareholders. This decision represents the last stage in raising the stake owned by the state from 53% to close to 95%.
Oltchim justified its request after winning a court appeal challenging a decision to suspend the capital increase operation that was requested by Lindsell Enterprises, which is managed by New Century Holdings investment fund.
Only hours after the stock market suspended trading with the dispute seemingly resolved in favour of the state, SIF Oltenia (another minority shareholder in the company) demanded that the shareholder registry and Bucharest Stock Exchange not proceed with the operation. This came after it submitted a request to the courts for the suspension of the operation, which was due to be assessed today. "We ask you not to proceed with the registration in the shareholder registry of the share capital increase," reads a SIF Oltenia address to Regisco, the company holding the Oltchim register, the CNVM (National Securities Commission) and the Bucharest Stock Exchange.
SIF Oltenia had said it believed that registration of the capital raise could seriously harm the minority shareholders.
The raise, which Regisco announced yesterday evening, that it had already registered, is designed to convert Oltchim''s historical debts, which were subsequently taken over by the state, into stock. This would mean a dilution of the stakes held by the minority shareholders by a factor of almost ten.
The chemical plant, one of the biggest companies of its kind to remain in state hands, is difficult to sell since it is not clear what stake the state will own when the conflict with the minority shareholders is over.
On Monday, Oltchim published its second-quarter financial results, which show the plant to have been running on losses, though it managed to end the first half of the year in profit.
The company lost 84.6 billion ROL (2.4 million euros) in the second quarter, though it still derived profit in the first half.
Oltchim generated net profits of 21.8 million RON in the first half (6 million euros), more than one third lower than for the corresponding period last year. Over the same period, the company''s turnover rose by 10% from 631.7 million RON (175 million euros) to 695 million RON (193 million euros).
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