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EU sources: Ford must refund 26.9 million euro, incentives from the Romanian state at the Automobile Craiova privatization

de Radu Rizea     HotNews.ro
Marţi, 26 februarie 2008, 15:49 English | Business

The European Commission will present on Wednesday, within the Commissioners College, the results of the investigation on the way the Romanian car producer Automobile Craiova was privatized, becoming Ford property. EU sources declared for HotNews.ro that Ford will have to refund 26.9 million euro, a sum considered as Romanian state aid during the privatization.

UPDATE: Ford representatives told HotNews.ro that they would not comment on the information but that the company is determined to make cars in Craiova. Until then, they say they are waiting with interest and optimism the Brussels decision.

"This means that the privatization price will grow 26.0 million euro. But I don't think interest will be paid", said the HotNews.ro source, adding that there are signals that Ford will not back up from the deal and give up Automobile Craiova.

The privatization contract for Automobile Craiova was signed by the Romanian state and the US-based group Ford in September 2007. The European Commission decided to investigate the possible state financial aid in the case and issued an order demanding Romania to cease any state incentive offering that wasn't previously notified to Brussels officials.

According to the European Commission, Romania imposed some privatization conditions, namely the production of at least 200,000 cars per year, starting with the fourth year after the privatization, as well as maintaining the same number of employees. It seems that Romania changed some of the conditions, a fact that may also be assimilated to state aid actions.

Ford agreed to pay the Romanian state 57 million euro for 72.4% of the capital at the factory and assumed 675 million euro worth of direct investments. Ford also promised a 300,000 cars per year production and an increase of the number of employees. 























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