SIF Oltenia sues Ford and the Romanian state

The SIF demands that a decision approving a share capital increase at Automobile Craiova (the company which controls the factory acquired by Ford) be annulled. Ford purchased 72 percent of the local factory from the Romanian state in 2007, and is currently making investments to launch car production here. The share capital increase, worth €250 million, was made to finance modernization work.
The factory was also owned by Korean producer Daewoo, but the state took it back after the Korean group experienced financial troubles, and re-privatized the car maker.

The U.S. auto maker became a shareholder of Ford Romania (the actual factory) following the share capital increase. Up to that time, the company had a single shareholder, Automobile Craiova, which did not participate in the share capital hike, and saw its participation reduced to 2.45 percent. The main minority shareholder of Automobile Craiova is SIF Oltenia, with 22.5 percent.
The first date for the trial is set for 26 March, according to information from the southern Romanian Dolj County Court, where the case is being heard. Automobile Craiova is compelled to report the litigation on the Bucharest Stock Exchange’s (BVB) electronic Rasdaq market, where it is listed, but has not yet made an announcement on this issue.

SIF Oltenia claims its interests were harmed after its indirect participation in Ford Romania dropped to 0.14 percent and because Automobile Craiova forewent preemption rights. According to market sources, Ford is currently negotiating with SIF Oltenia to end the litigation. Financial investment company officials declined to comment on the issue yesterday.
Ford representatives said that the car maker „increased the share capital by €250 million to meet commitments stipulated in the privatization contract [Ed. n. investments]. There are clear commitments stipulated in this contract, which we are abiding to“.
The Authority for State Assets Recovery (AVAS), former major shareholder of Automobile Craiova, through which the state sold its participation in the local factory, said the litigation on the share capital increase will not block the factory’s privatization, as the process has already been completed.

„In the worst case scenario, SIF Oltenia could obtain in court the lowering of Ford Romania’s share capital. I believe that the main reason for this court case is related to the company’s plan to sell its minority share,“ according to AVAS President Mircea Ursache.
It has been speculated that the SIF is trying to obtain a better price for its shares than that paid to AVAS during privatization.