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Oct 10, 2007 14:19 EEST
October 10 (SeeNews) - The European Commission said on Wednesday it has opened a formal investigation into whether Romania had granted state aid in the privatisation of its car manufacturer Automobile Craiova and the sale of the company to Ford Motor in September 2007.
"In this particular case, I have concerns that the state aid rules might have been breached", EU Competition Commissioner Neelie Kroes said in a statement.
The Commission has to verify whether some conditions in the privatisation had resulted in a lower sale price. The Romanian privatisation agency, AVAS, required from the successful bidder a minimum production level of 200,000 cars in the fourth year after privatisation, to continue the current activity for four years and to maintain the 3,900 former employees.
Last month, Romania and the U.S. Ford Motor Company signed a deal for the sale of 72.4% of Automobile Craiova. Ford Motor Company has pledged to pay 57 million euro for the majority stake in Automobile Craiova.
Ford Motor expects to reach an annual production of 300,000 vehicles by 2012 and to be spending around one billion euro annually to support its Romanian operations.
The European Comission required Romania to suspend the granting of any unlawful aid until the Commission takes a decision on its compatibility.
The opening of a formal investigation gives interested parties an opportunity to comment on the measures under assessment and does not prejudge the outcome of the procedure, the Commission added.
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