FORD ACQUIRES STAKE IN ROMANIA'S AUTOMOBILE CRAIOVA

Ford in Euro 57 million-deal with Romania for Automobile Craiova

17 September, 2007

BY OUR AUTOMOBILE CORRESPONDENT

Romania has inked a privatization deal for its own Automobile Craiova with Ford. Ford will acquire 72.4% of Automobile Craiova SA for Euro 57 million.
Ford's stake in Automobile Craiova will give it an opportunity to increase its presence in eastern Europe.

The contract was signed by Sebastian Vladescu, president of the committee of privatisation and state secretary in the Ministry of Economy and Finances of Romania, and by the chief negotiator of Ford, Lyle Waters in the presence of Romanian Prime Minister Calin Popescu Tariceanu and the US ambassador in Romania, Nicholas Taubman.

With Ford now buying majority stake of SC Automobile Craiova SA, Romania can now boast of the first American industrial investment in Romania.

Ford will now be able to sell its shares without any approval from AVAS, to a firm which is almost completely owned by the company and which will respect the obligations assumed in the sale-purchase contract, a media report added.

Ford expects to make 300,000 and 300,000 engines at the plant and will spend around one billion euros per year in Romania to support the operations at Craiova. Ford will sell most of the cars manufactured at Craiova, outside Romania. Production is expected to start by the end of 2008. In the first year of production, the number of vehicles are expected to touch 48,000 units, around 245,000 units in 2011, and 300,000 units in 2013.

Reports added that Ford has undertaken to make direct investments worth Euro 675 million in upgrading the works, and to increase the number of personnel.

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