Automobile Craiova’s privatization gets official start

Newsroom 17/08/2007 | 16:59

The sale of the Craiova company will be managed by negotiations based on final offers which are improved and irrevocable. All the offers for the 72.4 percent share package can be deposited at AVAS between May 23 and July 5. Interested companies must pay a participation guarantee of EUR 1 million.

According to officials from Automobile Craiova's privatization commission, by the end of April three companies had shown interest in buying the Romanian company: General Motors Corporation, Ford Motors Company and JSC Russian Machines. A condition for all interested parties to buy the carmaker is to have reported a turnover in the past year of EUR 10 billion and to have an annual production of 1 million cars.
AVAS's representatives say the winner of the privatization process will be selected based on certain qualification criteria: price per share, total investments to modernize the factory in Craiova and a 200,000-car production per year from the fourth year.

Three weeks ago, the government approved a memorandum according to which the state intends to sell a 95 percent share package from Automobile Craiova, meaning 72.4 percent owned by AVAS and 22 percent owned by SIF Oltenia, a financial investment fund. Automobile Craiova is the unique shareholder with voting rights at Daewoo Automobile Romania, producer and supplier of cars under a GM Daewoo Auto Technologies license, owning 49 percent of the total share package.

According to Valeriu Garlea, spokesperson for Daewoo Automobile, the company's total sales have dropped in the first quarter this year by 15 percent to 3,267 units sold.

Dana Ciuraru

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