General Motors Corporation, Ford Motors Company and Russian Machines have submitted their first non-binding offers for the privatization process at the Romanian car producer Automobile Craiova, a press release of the Finance Ministry reads.
Russian Machines is part of the Russian group Basic Element, which is controlled by Oleg Deripaska, one of the richest men in the world. A Romanian privatization official, Mihai Voicu, confirmed for HotNews.ro on Thursday that the Russian company submitted its offer on Wednesday, hours before the deadline expired.
Oleg Deripaska is known as “king of Russian aluminum” and is the world’s 40th richest man, according to the latest Forbes listing. Married to one of the Boris Yeltsin’s nieces, he is one of the select Russian moguls backed by the current leadership at Kremlin.
He owns Russian car maker GAZ, the Aviacor plane factory, the insurance company Ingosstrakh and bus maker RusPromAuto. But his most important asset is the Ruskii Aluminii (Rusal) company, the largest such company in Russia.
According to recent revelations by Romanian newspaper EvZ, quoting a classified note of the Romanian intelligence services, Deripaska has tried to take over control over the whole aluminum industry in Romania when Romanian state-controlled aluminum makers Alro Slatina, Alprom Slatina and Alum tulcea were put on sale by the 2000-2004 government led by Social-Democrat Adrian Nastase.
The companies were eventually sold to the Marco group, established by Marc Rich and later passed to Russian magnate Vitaly Machitski.
The sale of Automobile Craiova
The Romanian Government will sell 95% of the stock at Automobile Craiova, currently owned by the State’s Assets Agency (AVAS) and SIF Oltenia, a financial investment society.
AVAS and SIF Oltenia will sign an agreement allowing AVAS to offer, negotiate and sign the sale contract for the stock held by SIF Oltenia at SC Automobile Craiova.
A similar agreement will be signed with all the minority shareholders. The sale will result from the negotiation based on final binding offers, in two stages, with an initial offer bearing equal conditions for all bidders.
Daewoo Automobile Romania was born in 1994 as a joint venture involving the Romanian state (through Automobile Craiova) and Daewoo Heavy Industry, in a 49 / 51% balance of shares.
General Motors and other partners took over some of the bankrupt Daewoo Motor assets, but not the Romanian branch. In 2004, Daewoo Motor bought paid its debts towards the Romanian state with its own shares.
The Automobile Craiova transaction is estimated at some 60 million US Dollars, out of which 10 millions are the debt of the company towards firms in the Daewoo group.
The first investors to show interest in Automobile Craiova were Ford Motor, General Motors, Renault SA-Nissan Motor, the Chinese group Chery Automobile and the Indian company Tata.