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| WEIGHTY PRIVATISATION ROMANIA 17/03/2008 |
| (2008-03-17) |
| Last updated: 2008-03-18 17:19 EET |
Almost certainly, on March 21st the American giant Ford will become the major shareholder in Romania's Automobile Craiova, in which it will take over a stake accounting for 72.4 per cent of the equity, previously held by the Romanian State. It's “almost certain” because by that date a number of agreements must be signed with local institutions in Craiova, including an agreement with the City Hall regarding the set up of a customs office in the company.
The privatisation law, passed by Parliament, was promulgated Sunday by the President of Romania Traian Basescu. Originally, the Craiova-based car manufacturer was a joint venture set up by Romania in the '70s with France's Citroen, which later withdrew, following disagreements with the communist authorities of that time. Once the dictatorship deposed, the plant was taken over by South-Korean Daewoo, until they went bankrupt and the company was bought back by the State.
Third time lucky, people in Craiova hope. Particularly since this privatisation procedure was not without incidents either. After Ford signed the acquisition contract last year, the European Commission initiated an investigation into the privatisation. At the end of the probe last month, the European Commission requested the Romanian Government to recoup from Ford 27 million Euro, which, according to European officials, accounts for illegal State- aid to the privatisation. The Commission found that Romania had imposed a number of terms regarding specific output and workforce levels, and accepted in exchange a smaller sale price. That is, only 57 million Euro.
But the direct investments undertaken by the American producer in view of revamping the works are by no means trivial: 675 million Euro. Worth mentioning is that another leading car manufacturer, Renault, operates in Romania, with the French producing over 230,000 automobiles in Pitesti (southern Romania) in 2007. In Craiova, Ford committed in a first stage to produce at least 200,000 units a year. With this target reached, Romania will be the largest automobile producer in Central and Eastern Europe. And, in all likelihood, this is not the end of it.
The president of the Agency for State Asset Recovery Teodor Atanasiu announced that plans were afoot for two other major producers to relocate facilities to Romania this year. He disclosed no names, but the media had already let slip that it was Germany's Mercedes and Japan's Mitsubishi. No news from Rolls Royce yet!
(Mihai Radulescu)
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