Ford’s Auto Parts, Equip Suppliers Eye Spaces, Lands Of Romanian Tractor Mkr

"Many companies expressed interest in renting some spaces and lands. We even welcomed some of Ford’s auto equipment suppliers,” said Silviu Savin, administrator of Flavus Investitii, the company that bought Tractorul Brasov last summer.

However, Savin declined to mention the names of the companies interested and the number of investors interested, stressing that such information is confidential throughout business talks.

Tractorul was closed down in April 2007 and 1,800 employees were laid off.

In July 2007, Flavus Investitii, administered by Romania’s Centerra Capital Partners, won the bid and bought the plant’s industrial platform for EUR77 million, VAT not included.

Based on the sale contract signed by the plant’s liquidator, Transilvania insolvency House, and the plant’s new owner, Flavus Investitii SRL, the ownership transfer was sealed on August 10 for EUR77 million.

In September 2007, the European Commission started an investigation over an alleged illegal aid granted by Romanian authorities for the privatization of Tractorul Brasov.

Ford agreed last year in September to pay EUR57 million for a 72.4% stake in Romanian auto assemply plant Automobile Craiova and promised to invest another EUR675 million to upgrade the plant.

The European Commission launched a probe into the plant sale to Ford to see whether the Romanian government attached specific conditions to the privatization, resulting in a lower sale price and leaving Ford the only bidder in the sale. If this is the case, the privatization could involve elements of illegal state aid, the commission said.

Late February 2008, the European officials urged the Romanian government to recover EUR27 million from Automobile Craiova, which, they say, represents illegal state aid granted in the plant sale to Ford.

The Romanian privatization agency AVAS attached specific conditions to Automobile Craiova privatization, namely a minimum output level of 200,000 cars in the fourth year after the privatization, the continuation of the current activity for four years and the keeping of the 3900 former employees of Automobile Craiova.

Under these circumstances, Ford was the only bidder, offering a EUR57 million purchase price and winning the bid.

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