German firm PCC wants EU to review Oltchim aid
BRUSSELS, Oct 23 (Reuters) - German chemical group PCC urged EU antitrust regulators on Friday to look into a 50-million-euro ($75.03 million) Romanian state guarantee to Romanian peer Oltchim to see if it complies with EU state aid rules.
The Romanian government, which owns about 54 percent of Oltchim OLTC.BX, is providing the guarantee for a bank loan for the company to buy petrochemicals assets from Petrom SNPP.BX, the country's biggest oil firm and majority-controlled by Austria's OMV (OMVV.VI). The European Commission, the European Union competition watchdog, is now probing Romania's plan to grant a 135-million-euro debt-to-equity swap and a 339.2 million euro guarantee for Oltchim to see if they meet with EU rules.
The Commission should urge Romania to submit its 50-million-euro guarantee for review and should not let it fall under the EU temporary framework for state aid, said an official from PCC, which owns 12 percent of Oltchim.
"Oltchim was already in difficulty before July 1, 2008. The measures do not qualify under the temporary framework, the usual state aid framework should apply," Wojciech Zaremba, PCC's business development director, told Reuters.
The Commission adopted the framework last December to help companies hurt by the liquidity squeeze due to the credit crisis on condition the firms were not in difficulties prior to July 2008. The normal state aid rules are stricter. Oltchim's Chief Executive Constantin Roibu told Reuters in June the acquisition of Petrom's petrochemical assets would give it a pipeline of raw materials needed to boost output from current levels which is around a third of capacity. (Reporting by Foo Yun Chee; Editing by David Cowell)
