A new solution being considered for "Avioane Craiova": privatization without sale

• The Ministry of the Economy, willing to accept an alternative to the privatization of the Craiova-based company: joint-venture or partnership with a strategic investor

• Not happy with taking over the liabilities of "Avioane Craiova", Italian company Alenia favors this solution

• The company"s management has already been mandated to review the options available in order to save the company from bankruptcy

Italian aeronautical company "Alenia" is trying to become a shareholder of Avioane Craiova without taking over the Romanian company"s liabilities.

The EUR 8 million debt is the main reason why the Authority for State Assets Recovery (AVAS) has decided to recently discontinue the negotiations with the Italians, and the fate of Avioane Craiova now lies with the Office for State Interests and Privatization (OPSPI) of the Ministry of the Economy.

Former minister Sebastian Vlădescu, the consultant of Alenia, admits that the Italian company is still interested in "Avioane Craiova", but not for privatization in itself. Sebastian Vlădescu stated the following for "BURSA": "Alenia sent a letter to the Minister of the Economy expressing interest in a solution that would allow Avioane Craiova to continue its operations, but not necessarily by the privatization of the company. Alenia would like a solution that would not burden it with the company"s old debts, such as a joint venture or a collaboration".

The alternatives tested by Italians are already considered in Craiova, after the Board of administration and the executive management were mandated by the General Shareholders Assembly held on September 18th, to look for alternative solutions for attracting investments. The reason for this alternative solution is based on the decision of the General Shareholders Assembly, as the company is facing " imminent bankruptcy". Some of the solutions proposed during the September meeting of shareholders include the creation of an association between "Avioane Craiova" and a strategic investor, a joint venture or the renting of the company"s assets and tangible assets.

The Ministry of the Economy officially announced, at the end of last week, that it is looking to relaunch the activity of "Avioane" Craiova, by considering several alternatives for the classic privatization formula: "either by offering the possibility for potential investors to acquire the Ministry"s stake in the company, or by attracting investments in the aeronautical industry by any methods provided by the law".

• The management of "Avioane Craiova" is looking for other investors as well

Meanwhile, "Avioane" began looking on its own for a strategic investor that could help it survive.

"We have sent notifications to several major fighter jet makers of Italy, Sweden, Switzerland, and Argentina about what we plan to do at Avioane Craiova", said for BURSA, Radu Costaşuc, general manager of the company, who added: "We have received a few signs, but with no concrete results. We have nothing from Alenia so far".

The company"s general manager said that at the moment, "Avioane" Craiova is barely hanging on thanks to some contracts that don"t cover its expenses.

Victor Peţa, the leader of the Union of "Avioane" Craiova confirms the company is in an extremely difficult situation: "The company is now facing its hardest times ever. One week ago over 270 employees were laid off and those that are still left aren"t certain about their jobs either". He said that even though the company is looking for a strategic investor to help it solve its problems, it has yet to find one: "We"ve gotten in touch with several companies, but for now nothing has come together. We don"t really have a clear strategy, we are waiting to see what the Ministry of the Economy will decide", Mr. Peţa said.

The Romanian state has been trying for more than six months to find a buyer for its 80.97% stake in "Avioane" Craiova. Aside from "Alenia", Czechs of "Aero Vodochody" expressed interest in acquiring the company, but negotiations ended abruptly last summer.