Atanasiu: The EC will not cancel Automobile Craiova’s privatization

“It seems that things have been cleared up in Brussels, and we will receive an official response within one month, so that the contract can be put into effects as soon as the law is approved by Parliament. Our agreement with them was that we would receive an answer within the interval for which the contract’s validity was extended (Ed. n. 45 days, to 14 March 2008),” Atanasiu said.
According to Atanasiu the contract’s validity could be extended again, if the two parties wish, and only if there is a reason.

“We will ask the Government to require Parliament to approve the law regarding Automobile Craiova’s privatization in an emergency procedure. If the law is not approved by 14 March, we are justified to extend the validity of the contract. Anyway, I think that Ford will take over the company in April,” Atanasiu said.

Once the transaction is finalized, Ford must propose a merger between Automobile Craiova, Daewoo Automobile Romania and Mecatim Timisoara to shareholders. The resulting company will be divided into two companies, one for car production assets and one for land and assets. AVAS’s President believes this process will take two years. The state will decide how the new company will be capitalized.

The privatization contract between Automobile Craiova and the Ford group was signed in September 2007. Ford took over the state-owned shares of Automobile Craiova (72.4 percent) for €57 million, and pledged to invest €675 mln to modernize the factory and increase the number of employees.

The European Commission began an investigation in October 2007 to determine if the Romanian government helped Ford in the takeover. In the meantime, the Government asked Parliament to suspend discussions on the law regarding the privatization.