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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