Troubled privatization

Newsroom 04/03/2008 | 17:36

Tractorul, destination unknown
Tractorul factory sold its first tractors on the local market in 1960. The first model was the IAR 22, a pure Romanian concept, equipped with Fiat engines. After 1990, the factory entered the slow process of privatization.
Several times during this process, the company employees went on strike and organized public protests as their disappointment with the way the Romanian authorities were handling the privatization mounted.
In 2004, Tractorul was one step away from being sold, the buyer being the Italian tractor factory Landini. But misunderstandings with local authorities and elections derailed the privatization process. Despite this, the company continued production, starting to manufacture newer kinds of tractors.
Last year, the factory ceased activity, after the shareholders general assembly decided to liquidate the factory and to dismiss all 2,000 employees.
Last year, Flavus Investitii of Bucharest bought the industrial platform at Tractorul Brasov for almost EUR 80 million.
The choice of buyer came as a surprise to many.
The auction commission, in charge of dispensing the plant's assets, said at the time that one of the criteria to elect the winner was that the company keeps the activity at Tractorul for five years. In the Finance Ministry records, Flavus Investitii is listed as being involved in real estate projects.
It is controlled by two businessmen shareholders in an investment fund, Victor Vadaneaux and Silviu Savin, also shareholders in Centerra Capital Partners. The fund owned by the two Romanian businessmen became last year the main partner of hedge fund Cheyne Capital. Cheyne is focused on private equity, infrastructure and real estate investments.
Vadaneaux and Savin plan to invest around EUR 100 million in the tractor production facility.
The money will be spent on new equipment and real estate such as industrial buildings, said Savin.
The new owners have not yet decided what they will do with the entire 124-hectare platform at Tractorul, but they will keep the tractor production activity for at least ten years, they have underlined.
The Tractorul platform is made up of three units: the tractor production facility, which was evaluated at some EUR 43 million, VAT not included, another unit for the production of tractor parts, evaluated at some EUR 14 million, and other independent assets, worth around EUR 20 million.

By Dana Ciuraru

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