IAR Ghimbav deal delayed two months joining queue of stalled privatisation deals

Published: 5/2/2000

Eurocopter, the only bidder left in the ring for the sale of the Romanian Government"s 70% stake in the helicopter producer IAR Ghimbav in Brasov, has asked for an extension on the deadline for a final offer of the 18th April. The Romanian authorities following Eurocopter"s preliminary undisclosed offer made on 28th March have granted an extention to the 18th June. Reports have said that Eurocopter initially sought a three-month delay, but the Romanian"s were only prepared to offer two months. According to Eurocopter quoted in Flight International, the delay is due to “ongoing talks regarding the legal, industrial and financial aspects" of the deal and that nothing is frozen. The delay at this late stage does however, suggest that Eurocopter may have found additional questions about the company during due diligence. Following the experience of serious problems at another Romanian producer Romaero, by the UK"s Britten-Norman after due diligence and a final offer. The possibility of potential future problems is no doubt high in the minds of Eurocopter"s negotiators. The Romanian privatisation agency is not having a successful campaign of selling the aerospace industry. This sale of IAR Ghimbav is the third effort on the part of the Romanian State Ownership Fund (SOF) to sell the plant, the last effort with Bell Textron falling apart in 1998. When combined with the failure of the B-N deal for Romaero, currently in arbitration, with the bidder recently being sold to Oman investment group, Zawawi, and having another potential bidder, Romanian company Grivco International fail to bid, the track record on sales is not good. The privatisation of the engine maker Turbomecanica is also proving to be a difficult task with the announcement that it will be submitted again for privatisation for the fourth time. With bidders required to register for the sale of 62.54% of the company held by the SOF by the 11th April. No information is available on how many qualified bidders registered. Other investors in the engine maker include regional investment company SIF Mutenia, 0.63%, the Romanian Company Cyprus 5%, Broadhurt Investments 5.9% and small shareholders. One chink of light for the agency was the possibility of the reopening of the AS 330 Puma production line at the plant in the event of a successful Eurocopter deal deal, along with potentially the AS350BAS and A355N Ecureils, the latter already the subject of an agreement between the French and Romanian government"s signed in 1996. Associated articles: www.concise.org Eurocopter bid for IAR: 7th March 2000

Article ID: 1555