Romania buys Daewoo's local car unit for $60 mln

Automotive

Romania bought Daewoo Motor Co.'s 51% stake in its local auto unit for $60 million to resell it as the eastern European country's car market booms and investor interest increases ahead of its entry into the European Union. Romania, which now owns 100% of the unit, plans to sell at least a 51% stake, Economy Minister Codrut Seres said in a news conference today. The ministry paid $50 million for the stake and assumed $10 million of debt, it said in an e-mailed statement. Ford Motor Co. said today it was interested in buying the plant. General Motors Corp., Renault SA and China's Chery Automobile Co. are among other possible bidders for the plant, newswire Mediafax reported yesterday. „We are definitely interested in acquiring the facility,” Todd Nissen, a Ford Europe spokesman, said in an e-mailed release today. „We will continue to develop our business plan, and be prepared to pursue due diligence when the government begins the privatization process.”

Ford announced today plans to increase production at a German plant by 4.9% beginning next month. Daewoo Automobile Romania SA had a 9.4% Romanian market share in the first seven months of the year with sales of 13,638 cars, trailing Renault SA's Dacia unit's 42% market share and sales of 60,537 new cars in the period. The agreement, signed after more than a year of negotiations, allows the Craiova, Romania-based plant to continue producing under the Daewoo name until October. Seres said the government also agreed to continue production, introduce a new model and not fire workers. „The company is in good financial shape,” Seres said at the televised news conference. „Interested parties will appear.” (Bloomberg)

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