State Assets Recovery (AVAS). AVAS indicated it would prioritize the privatization of the company because the selected investor, Czech Aero Vodochody group, demanded facilities that “are incompatible with all regulations governing a Democratic country.”
AVAS yesterday published its decision to end negotiations with the Czech investor, saying that Aero Vodochody demanded during negotiations that the Romanian state guarantee that Avioane Craiova not declare bankruptcy prior to the effective takeover, that the authorities implement a restructuring program with comparable layoffs prior to privatization, and that the investor be awarded up to 50 percent of the amount paid “for whatever it finds in the company.” The AVAS announcement comes less than one day after Aero Vodochody officials suggested that the critical point reached during negotiations could lead to the failure of the privatization by the Czech investor. “Although we used all opportunities to express our point of view and the fundamentals of our business plan, we regret to say that it seems that our proposal cannot be accepted, and we are very close to the deadline, continuing to search for and await a viable new solution,” said Igor Hulak. The Czech investor, which announced its intention to participate likewise in the privatization of IAR Ghimbav, in the hopes of creating a Central and Eastern European aeronautical holding, did not comment by the close of the print edition.
Aero Vodochody, the world’s largest producer of military training aircraft, was selected by the Romanian state this spring over two other known competitors, including the Italian Alenia group. The Czech company was taken over two years ago by Penta Investments, and following a restructuring program, the new majority shareholder managed to make a profit less than ten months after the takeover. Aero Vodochody officials recently declared for Business Standard that the restructuring program they plan for Avioane Craiova does not involve substantial layoffs, because they wish to develop production and require qualified personnel.
Established over 35 years ago, Avioane Craiova is Romania’s only military aircraft producer, which constructs the NATO standard IAR 99 Soim (Hawk) plane. The company ended the year 2007 with losses worth some €2 million, six times higher year-on-year.
