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The sale of the government's stake in the plastics manufacturer Oltchim to a media mogul has met scepticism from experts, some of whom doubt it will ever go through.
Romania's government on Monday is to sign the contract for the sale of its majority stake in chemical producer Oltchim.
The auction was won on September 21 by the businessman and media mogul Dan Diaconescu who offered 203 million lei [45 million euro] for 54.8 per cent of the company.
Diaconescu's bid was double his initial offer and included the backing of a unknown foreign investor, according to reports.
The government said that all the terms of the privatization process were met, and it awaited delivery of the cash by the end of this month.
"From now on Oltchim will belong to the Romanian people. I bought it because I did not want the company to be acquired by a foreign entity,” Diaconescu said.
He added he intended to maintain the company's core activity, and to retain Oltchim's workforce of around 3,500 people.
But several analysts have voiced doubts over whether the winner of the bid will ever make the promised payment.
“I can’t understand how the government accepted an offer from a person who has no expertise, almost no business experience and who just says he is backed by unknown investors,” Varujan Vosganian, a former Economy Minister, said.
“Oltchim is a huge company, which should not be have been sold only on promises,” he added.
Political analyst Cristian Tudor Popescu is another doubter.
“Diaconescu wants only to just promote himself as the saviour of the nation and gain support ahead of the general elections,” he said.
Diaconescu is the owner of a populist TV station, OTV, which in the past has been penalised, among other things, for incitement to racial hatred and for broadcasting a video showing former Prime Minister Emil Boc naked in a sports locker room.
Diaconescu is also leader of People's Party, PP, a party that advocates big tax cuts and higher wages and pensions.
According to recent polls, it may come in third place on around 10 per cent of the vote in the elections due in early December.
In recent months, the government has been pushing forward with a privatisation timetable for the disposal of its majority stake in Oltchim as part of a commitment to economic restructuring being carried out in consultation with the IMF.
Based at Ramnicu Valcea in southern Romania, Oltchim produces caustic soda, petrochemicals, agrochemicals, inorganic products and building materials. The company registered losses for the last five years and has debts of around 500 million euro.
Production at Oltchim stopped last month, with the company apparently suffering from a lack of capital to secure feedstock supplies.
The upcoming privatization has caused industrial unrest, with employees protesting at the plant in Ramnicu Valcea, and 17 executives, including the General Manager, handing in their resignations.
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