SIF Oltenia asks Ford to pay a good price for Automobile Craiova

Automobile Craiova owns Daewoo Craiova, a local car manufacturer Ford is interested in buying. SIF Oltenia owns 22.06 percent of Automobile Craiova shares, while AVAS has the controlling interest (72.4 percent of shares).

"Ford must offer the same price per share for our stock as the that paid to the state, otherwise we are not going to sell, and SIF will remain a shareholder until the arrival of better times," SIF Oltenia President, Dinel Staicu, told Business Standard.

He denied information published by a local daily two weeks ago that SIF Oltenia plans to ask for 20 percent more per share than the price Ford is to pay the state.

Analysts say SIF Oltenia is not likely to obtain a better price than AVAS for its stock. "I do not know how things are going for Automobile Craiova, but the package providing controlling interest is usually awarded a better price per share than lower packages and the market price," according to Iulian Panait, President of the KTD Invest investment consultancy company .

On the Bucharest Stock Exchange Rasdaq market, the share package owned by SIF Oltenia in Automobile Craiova was worth some €39 million (RON 122 million). On July 5, when Ford filed its offer to buy the local car manufacturer, SIF Oltenia's stock was worth €68.4 million.

The price Ford is offering for the AVAS stake in Automobile Craiova was not made public. The U.S.-based car maker pledged to make direct investment worth €675 million in the local company. Ford is to spend a total of €1 billion by 2012 in Romania.

SIF Oltenia suggested that AVAS include a clause in the Automobile Craiova privatization contract, so that strategic decisions for the company can be made only with 80 percent of shareholders' votes, according to Staicu. He added AVAS representatives have promised to take this proposal into account and schedule a meeting between AVAS and Ford representatives. AVAS, however, has declined to comment on the information.