Friday, Sep 14, 2007
(Updates item at 1232 GMT with comments from AVAS president)
BUCHAREST (Dow Jones)--Saudi Arabian Al Arrab Contracting Co. Ltd may finalize their negotiations with the Romanian authorities to buy state-owned electrical equipment-producer Electroputere Craiova (EPT.RO) next week, news agency Mediafax reported Friday, citing AVAS president Teodor Atanasiu.
Atanasiu said: "If the contract is finalized today, it will be handed to the buyer for approval and if they sign it by Wednesday next week, we will sign it shortly after."
AVAS selected Al Arrab's offer for the plant's sale in June. The agency didn't give details on Al Arrab's offer, but people close to the matter said the transaction is worth more than EUR120 million. The sum includes EUR2.3 million to be paid for the majority stake, EUR37 million working capital, EUR20 million investments and up to EUR61 million in debt.
AVAS also said it will soon begin negotiating the contract with Al Arrab in the next stage of the privatization of Electroputere, which has been put up for sale six times so far.
Previous attempts at privatization have failed over lack of interest in buying the entire company, which incorporates four divisions that manufacture locomotives, electric engines, power transformers and other electrical equipment.
AVAS has been reluctant to split the company up mainly over concerns as to the fate of its 3,000 employees.
In May, AVAS shortlisted two Romanian companies A5 Invest Caransebes and Grup Feroviar Roman and Al Arrab Contracting Company from five companies interested in buying a 62.82% stake in the loss-making Electroputere.
In 2006, the company reported losses of 50.1 million lei ($20.4 million) compared with RON35.5 million losses posted a year earlier.
Agency Web site: www.mediafax.ro
(END) Dow Jones Newswires
14-09-07 1446GMT
