Ongoing arbitration case cited as reason for withdrawl

Published: 4/26/2000

According to reports Romanian company Grivco International may withdraw from their acquisition of Romanian producer, Romaero through privatisation, claiming the pending court case in the UK between the State Ownership Fund (SOF) and the UK company Britten Norman (BN) is leaving the future of the company in the courts of two countries. According to lawyers, Linklaters, the action currently underway in London is an effort by the Romanian authorities to have the tender deposit made by BN unfrozen. As it has been since the two parties began to dispute the terms of the agreement under which BN took control of 72.9% of Romaero from the SOF in return for $80.5m. BN subsequently, after undertaking due diligence, claimed that they had not been made fully aware of the company"s condition and withdrew the offer proposing a smaller cash sum and guarantees of investment. The SOF refused the offer; the tender bond was frozen in the UK courts and the ownership dispute went to arbitration in Paris, where it is currently awaiting a decision. Grivco is claiming that it was offended that it"s offer for Romaero was not accepted the first time around. The company has however, recently withdrawn from the bidding process for IAR Ghimbav in Bratsov, where Eurocopter appears to be the only contender and according to the SOF General Manager Alin Giugiu, is making “ remarkable progress" in negotiating to buy the plant. It is difficult to tell therefore if the Romanian Grivco is simply getting cold feet over Romaero and is using the delay as a means of finding an excuse to leave or extract a better deal. Associated articles: www.concise.org 29th November 1999:Romanian privatisation restart

Article ID: 1567