EUR 120 M to be paid by Al-Arrab for Electroputere Craiova takeover

Publish date: 07-11-2007
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After five failed attempts, AVAS representatives have finally succeeded to privatize the company Electroputere Craiova. The privatization contract was signed yesterday by the president of the Authority for State Asset Resolution (AVAS), Theodor Atanasiu, and the president of Al-Arrab Contracting Co., Said Bahjad Said.

"The company was in a poor situation. The arrival of a powerful investor as shareholder of the company was the only solution in order to give a chance for the continuation of the activity of Electroputere Craiova," said AVAS president, Theodor Atanasiu, quoted by Rompres. The total value of the transaction through which the Saudi company Al-Arrab Contracting Company Limited will acquire the Romanian company Electroputere Craiova amounts to EUR 120 M. But the money will be remitted gradually.

Thus, AVAS sells 78,009,632 shares, representing 62.8259 per cent of the share capital of Electroputere Craiova, for EUR 2.34 M. subject to the conditions assumed by the purchaser. The Arabs have prepared an investment programme of EUR 23.08 M, of which over EUR three M represent environment investments, and EUR 20 M investments for development and re-equipment.

Also, in order to settle the crisis of liquidity of the company, the firm from Saudi Arabia will make an infusion of working capital in the amount of EUR 37 M. Al-Arrab assumed also the debts of the company from Craiova of around EUR 44 M, and commercial guarantees to banks of USD 20 M, the firm being on the brink of applying the legal provisions regarding insolvency. But the buyer was not afraid of the amounts owed by Electroputere Craiova, because the company represents a method to tap the European Union market.

"The acquisition of Electroputere represents a historical point very important for our globalization strategy. We chose Romania as point of entry into the European Union thanks to the attractiveness of the environment, through the skilled personnel and the transparency of the investment policy," said the president of the Saudi firm, Said Bahjat.

The purchaser of the Craiova company made a turnover of USD 133.85 M and a net profit of USD 13.65 M in 2006, the object of activity of the firm being the construction of high and medium power electric stations. The plant Electroputere Craiova was established on September 1, 1949 as a producer of equipment for the domain of energy and rail transport.

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