PRIVATISATION: Petrokemija Seeking Privatisation Consultant
Economy Minister, Ivan Vrdoljak (HNS), announced privatisation as the next logical step for the Kutina-based fertiliser producer, Petrokemija, after the company had been successfully recapitalised in August.
Petrokemija is the market leader for over 40 years in producing and supplying an assortment of fertilisers on the Croatian and Southeast Europe markets. The company employs 2,291 people and yearly manufactures 1.25 million tons of fertiliser.
They are the second largest exporter in the country behind INA. During the first half of 2013, the volumes of exported fertiliser were 265,000 tonnes (57% of total sales equating to 457,000 tons of sold fertilisers), and actual income from foreign markets amounted to €86 million.
Speculation regarding the privatisation of Petrokemija began in January when Mladen Pejnovic (SDP), Head of the State Office for State Property Management (DUUDI), gave a statement to local media in which he emphasised that in the short-term and the mid-term the government has to determine how to end operating at a loss; in 2012, losses totalled €24 million. In contrast, Economy Minister Ivan Vrdoljak (HNS) responded, at the time, that the privatisation was not an option.
The privatisation speculation was further fuelled by the government’s decision in February to replace members of the company’s management board – Tomislav Seletkovic, Antonio Perosevic-Galovic and Nenad Marinovic – with Karlo Dosen, Kresimir Kvaternik and Zarko Rijetkovic, who are all financial experts with expertise in restructuring and privatisation projects.
On 15 July 2012, the general assembly passed a decision on the recapitalisation of Petrokemija, by reducing its share capital by €44.4 million, due to the accumulated loss over the last four years totalling €43.1 million. The reduction was executed by decreasing the nominal share price from €35.9 to €22.6.
At its cabinet session held on 30 July, the government gave approval to DUUDI to participate in the increase of the company’s share capital through a public offer to existing shareholders by offering subscription and payment of a maximum of 436,002 shares at a price ranging from €22.61 to €30.33 per share. After the entire process of recapitalisation was completed in mid-August, the company’s share capital now amounts to €99.4 million.
The government also instructed the competent authorities to start the process of selecting a strategic partner for the troubled company with the state retaining 25%+1 share ownership of Petrokemija.
Last week, the HNS-led Ministry of Economy, without consulting its local coalition partners (SDP), instructed Petrokemija’s supervisory board to appoint Dragan Marcinko as the new CEO, replacing Josip Jagust, and Nenad Zecevic as a new board member, replacing Zarko Rijetkovic. They will be in charge of accelerating the future privatisation process.
On 10 September, the company’s management board initiated the process of bidding for a financial advisor for the selection of a strategic partner. Minister Vrdoljak announced that the privatisation will be implemented as soon as possible, and mentioned possible investors from Europe; namely, Borealis (Austria), Agrofert (Czech Republic) and Yara (Norway), which is the leader in the global ammonia trade with a worldwide presence in 150 countries…