Friday, February 16, 2007

AP: Romania Set to Sell Stake in Car Factory

Associated Press 02.16.07

The Romanian government is preparing to sell its 72.4 percent stake in a former Daewoo car factory to a foreign investor, with the privatization process to begin in March, officials said Friday.

Ford, General Motors, Renault -Nissan and India's Tata Motors have expressed interest in buying the Romanian plant, in the southern city of Craiova.

"The government wants a quick and transparent privatization process for this company," Prime Minister Calin Popescu Tariceanu said after meeting with Ford representatives on Friday.

Romania wants a major investor to take over the struggling company, which still produces Daewoo models, including Cielo, Matiz and Nubira. The government has said price won't be the main criterion in the sale, but the investor's ability to maximize production.

The factory employs about 4,000 workers and can produce up to 200,000 cars and 300,000 engines per year. Analysts see the Romanian factory as a good opportunity for carmakers who want to take advantage of cheaper specialized labor in Romania.

Romania, which joined the EU in January, paid US$60 million (euro46 million) last year to buy back a 51-percent stake in the company from the bankrupt Korean company's creditors

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