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Ford in bid to buy Romanian car plant

Automotive

Ford Motor Co. has made an offer of €57 million ($78.5 million) for a majority stake in the Romanian car manufacturing plant formerly owned by South Korea’s Daewoo Motor, Romania’s Authority of State Assets Recovery, AVAS said Friday.

In July Ford submitted the only bid in a tender for a 72.4% stake in the sale of Craiova car plant, based in southern Romania. Ford has said it plans to invest €675 million ($930 million) in the plant. It intends to raise employment to around 7,000 from 3,900 at present, and plans to reach an output of 300,000 units a year. The factory can currently produce up to 200,000 cars and 300,000 engines per year.

In August 2006, the Romanian state bought back a 51% stake in the company from Daewoo’s creditors for €44 million. The Romanian state now owns 78% of the plant, while local investment fund SIF5 Oltenia holds the remaining 22%.

A number of multi-national motor manufacturers have set up in Romania recently as the industry takes advantage of cheap labor and favorable tax rates in Romania. (birn.eu.com)

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