Ford Could Bail On Automobile Craiova – Senate Chairman

Romania granted no illegal state aid in the privatization of auto-assembly plant Automobile Craiova, and the delays in the European Commission’s investigation could get Ford to back out of the transaction, Senate chairman Nicolae Vacaroiu said Friday.

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"I think the European Commission will find everything was fine with the privatization, but any more delays and Ford could pack up and leave," Vacaroiu said.

He added all state aid in the privatization of Automobile Craiova is legal, and the state did not favor the U.S. giant by granting any facilities.

"There was no illegal state aid and they got nothing extra compared to others that took over state-owned companies. Renault (majority owner of Automobile Dacia, e.n.) and others received the same facilities," Vacaroiu said.

The head of Romania’s’ privatization agency AVAS, Teodor Atanasiu, said end October the results of the European Commission’s investigations are predictable, but procedures could take up to 18 months.

The Commission is investigating whether writing off debts and imposing certain conditions on the privatization of Automobile Craiova qualify as state aid.

U.S. giant Ford signed in September the privatization contract to buy a 72.4% stake in Romania’s’ Automobile for EUR57 million, and undertook to invest EUR675 million in upgrades. The deal is set to be completed January 30, 2008.

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