Romania seals deal with Daewoo, aims new sale

Bucharest, Aug 30 | Updated: Aug 31 2006, 05:30am hrs
Romania signed a deal on Wednesday to buy back shares in carmaker Daewoo Automobile Romania from its joint-venture partner, South Koreas Daewoo Motor, opening the door for a new sale, economy minister Codrut Seres said.

The government has been fighting for months to take over the 51% stake held by the bankrupt Daewoo Motor to free its hands in finding a new strategic partner for the plant.

After the transfer is finished and we obtain all the necessary approvals. We will restart the privatisation process, Seres said during a signing ceremony.

Under the terms of the deal agreed in June, Romania will pay $51 million for Daewoo Motor's stake and $10 million for debts stemming from past loans secured by the carmaker.

Seres said it was not clear yet how large the stake put up for sale will be, adding a tender should be launched in 60 days after the share transfer is completed on October 15. We need to work out whether it (the stake) is 51%, 49%, 60% or 100% , he said.

Last month, Seres told Reuters that price would not be a decisive criterion to win the bidding, but added the government wanted to get back money it would pay for Daewoo Motor's stake.

Ford Motor Co, the number-two US carmaker, said on Wednesday it was definitely interested in buying the car plant from the Romanian government.

We have already declared our interest in the Craiova facility on several occasions. We can confirm we are definitely interested in acquiring the facility, a statement released by Ford of Europe said.

The government sources have told Reuters that apart from Ford three other companies had expressed an interest in taking over the plant General Motors, Renault-Nissan Motor and Chinas Chery Automobile.

Daewoo Motor put in capital worth $156 million after forming a joint venture in 1994 with Automobile Craiova, which is controlled by the Romanian government. The Korean firm had spent around $850 million to upgrade the plant near the south-western city of Craiova, built in the late 1970s to produce Citroen-licensed cars under the Oltcit brand.