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SIF Oltenia sues Ford and the Romanian stateUpdated: 04-03-2009 |
The largest foreign investment in Romanian in the past few years could be blocked by a court ruling, if the SIF Oltenia financial investment company wins a court case against U.S. Ford car maker, local Automobile Craiova and the Romanian state.
The SIF demands that a decision approving a share capital increase at Automobile Craiova (the company which controls the factory acquired by Ford) be annulled. Ford purchased 72 percent of the local factory from the Romanian state in 2007, and is currently making investments to launch car production here. The share capital increase, worth €250 million, was made to finance modernization work. The factory was also owned by Korean producer Daewoo, but the state took it back after the Korean group experienced financial troubles, and re-privatized the car maker.
The U.S. auto maker became a shareholder of Ford Romania (the actual factory) following the share capital increase. Up to that time, the company had a single shareholder, Automobile Craiova, which did not participate in the share capital hike, and saw its participation reduced to 2.45 percent. The main minority shareholder of Automobile Craiova is SIF Oltenia, with 22.5 percent.
The first date for the trial is set for 26 March, according to information from the southern Romanian Dolj County Court, where the case is being heard. Automobile Craiova is compelled to report the litigation on the Bucharest Stock Exchange's (BVB) electronic Rasdaq market, where it is listed, but has not yet made an announcement on this issue.
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