Ford to sign for Automobile Craiova on September 12 in Frankfurt International Motor Show

Publish date: 07-09-2007
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Next Wednesday's International Motor Show in Frankfurt will witness the signing of the agreement for privatizing Automobile Craiova, the signatories being the Romanian state and the 'Ford' company. The Romanian authorities' desire to endow the transaction with a notoriety bonus was the reason behind the move. 'The signing of the contract with Ford is scheduled for Wednesday in the second and final day of media access to the International Motor Show. The authorities thus want to add notoriety to the closure of the contract, and implicitly to Romania's auto-industry strength following the entry of a new powerful investor' official sources stated.

The two sides will sign the English version of the contract in Frankfurt on September 12, with the Romanian version to be signed 2 days later in Craiova. Prime Minister Calin Popescu Tariceanu will be present at the signing ceremony in Frankfurt.

Romanian and Ford representatives met on Wednesday to review the contract terms for the privatization of Automobile Craiova, after the transaction's last bearings were clarified on Tuesday. The Authority for Capitalizing State Assets (AVAS) is negotiating with Ford a judicial formula for the plant's plot of land the value of which should hike the prices of the company shares. That represents the last issue to be solved before the contract is signed.

The two sides agreed on including a term that ensures that the American investor would not be faced after taking over the plant with a flurry of demands on the debt owed by the plant to former creditors. The term also seeks to clarify the situation of the company's real estate assets. Currently the entire production assets are owned by Daewoo Automobile Romania, with the exception of those that were phased out due to their high level of wear.

John Fleming, the President of Ford Europe, stated last week that a 12 to 15 week period would be needed from the moment of signing the contract to the moment the plant is converted to the production of Ford vehicles. He did not mention the Ford brands that would be produced in Craiova, but the new Fiesta is the most likely candidate. The new version of Fiesta would also be presented in the International Motor Show in Frankfurt. The American manufacturer has committed to making direct investments of up to EUR 675 million in modernizing and upgrading the plant and also to raising the number of employees from 3,900 to 7,000 or even 9,000 people.

Nine O'Clock

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