Romanian State on a quest for strategic investor at Daewoo Craiova

“We shall have to find another investor for the Craiova Plant.” Privatisation minister Ovidiu Musetescu yesterday officially admitted that the financial situation of the Daewoo plant was uncertain: the $800m debts must be restructured, while the company is little likely to make it by itself on the market.
The state still holds a 49% stake in the company and, after holding on to these shares it now wants to sell them to an investor.
The car plant in Craiova cannot make it by itself on a market that is the battlefield of large multinationals. Its only chance for survival is a new powerful investor that can provide support, Privatisation minister Ovidiu Musetescu said yesterday.
There may be one problem, though: investors aren’t exactly rushing to buy Daewoo Craiova, since the company has debts amounting to 800 million dollars, according to Musetescu.
However, the Privatisation minister does see a glimmer of hope, as the Koreans are considering “significant restructuring” of the debts accumulated by Daewoo Craiova. This is in fact one of the two or three “saving” alternatives that Musetescu has in store for the plant.
“Together with the Korean partners, we have set the main parameters that we have to apply so that the debt issue can be legally solved. We shall have to find another investor for the Craiova plant,” Ovidiu Musetescu said. There will be no investor until the problem of Daewoo Automobile Craova debts is solved legally and the consequences of the Daewoo Motor restructuring are sorted out.
The quoted investor may be Japanese group Toyota, which “seems the most motivated” to take over the plant, Musetescu says.
According to the Romanian official, a Toyota delegation will soon come to Romania to assess the company. Two years ago, Toyota assessed ten Romanian companies for possible partnerships, but plans failed to materialise. The Japanese group is already operating in the area, as it is building a car plant in Poland and holds production facilities in the Czech Republic and Turkey.
Kia Motors is also said to be interested, but only wants a medium-term commercial relationship with Daewoo Automobile Romania, with no investments involved. “We want something else,” Musetescu says.
“The important thing is that we are actually in negotiations,” says Valeriu tones, public relations manager with Daewoo Automobile Romania. “At any rate, a solution will be eventually found by the three parties involved: the Romanian State, Daewoo Motor (GM Daewoo Automobile Romania i.e.) and the newly-established company (GM Daewoo Auto Technology i.e.), the main supplier of the Craiova-based plant,” tones feels.
French group PSA-Peugeot Citroen wanted to built a 700m euro auto plant in Eastern Europe, but the Romanian authorities were not fast enough and the French decided to build the factory in Slovakia.
ionut.bonoiu@zf.ro