Romanian President OKs Automobile Craiova Privatization

Romania’s President Traian Basescu on Sunday signed a decree promoting the privatization law of state-owned assembly plant Automobile Craiova SA, the presidency said in a statement.

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Ford Motor Co. (F) will take over Automobile Craiova on March 21, during a ceremony that will be attended by Prime Minister Calin Popescu Tariceanu and Ford Europe president John Fleming.

In September last year, Ford agreed to pay EUR57 million for a 72.4% stake in Automobile Craiova and pledged 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.

Following EU investigations, the Romanian government has to recover EUR27 million from Automobile Craiova, which represent illegal state aid in the context of the company’s sale to Ford.

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