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Sep 12, 2007 16:34 EEST
(adds quotes, details, background)</p>BUCHAREST
September 12 (SeeNews) - Romania and U.S. Ford Motor Company on Wednesday signed a deal for the sale of 72.4% of Automobile Craiova, the owner of car maker and distributor Daewoo Automobile Romania, the U.S. company said.
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The deal was signed by Lyle Waters, Ford’s chief negotiator, and Romania’s Deputy Finance and Economy Minister Sebastian Vladescu at the 62nd International Motor Show in Frankfurt, Ford Motor Company said in a statement.
“We are acquiring a plant with a skilled and enthusiastic workforce and together we will work to transform the plant into an industry benchmark for vehicle manufacturing in central Europe," the CEO of Ford Europe, John Fleming, told a news conference after the signing ceremony.
Ford Motor Company has pledged to pay 57 million euro ($79 million) for the majority stake in Automobile Craiova. It also would invest 675 million euro in the Romanian company and almost double the number of employees to some 7,000. The U.S. car maker 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.
“While I do not want to be too specific at this stage about the vehicle we shall be building in Craiova, I can confirm that we will start with a small car built solely in Craiova and we expect up to 90% of vehicle production to be exported,” Fleming said.
Romania has received non-binding bids for Automobile Craiova from General Motors Corporation, Ford Motor Company and JC Russian Machines, but only Ford filed a final offer by the July 5 deadline.
Automobile Craiova stock lost 24.86% to 26.3 lei by 0735 GMT on Monday on the Romanian over-the-counter RASDAQ market before RASDAQ suspended it from trading until the deal for the sale of the company is struck.
Automobile Craiova swung to first-half net profit of 1.71 million lei ($716,000/517,000 euro) from 84,000 lei loss a year earlier.
Daewoo Automobile Romania was a 49:51 joint venture of the Romanian government and South Korea's Daewoo Motor Co. It was left out of the assets of Daewoo Motor Co when General Motors bought the bankrupt South Korean carmaker in October 2002. The Romanian government bought out the stake of its partner in the joint venture for $60 million (43 million euro) last year.
Daewoo Automobile Romania sold 23,780 vehicles in 2006, up 15% from 2005. The other Romanian carmaker Dacia, owned by Renault, sold 196,592 vehicles in 2006, up by 19.6%.
Ford has recently expressed interest in bidding in a privatisation tender for the troubled automobile producer Zastava in Romania's soutwestern neighbour Serbia. It rejected in August a media report that it was likely to build half-a-billon dollar factory to assemble cars in Serbia's western neighbour Croatia.
($ = 0.7221 euro)
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