SIF Oltenia Expects 6 Million RON For 19.53% In Bankrupt Company

• ARO - Campulung"s last remaining assets are hardly worth 2 million RON, market sources say

Financial investment firm SIF Oltenia (SIF5 on the Bucharest Stock Exchange) is planning to auction off 19.53 per cent in late carmaker ARO Campulung, which is currently undergoing a bankruptcy procedure. The firm expects to receive 6 million RON for its stake in ARO, in line with calculations based on the face value of ARO shares, which is 2.5 RON.

Nevertheless, prospective bidders may not rush to the auction scheduled for next week, as ARO barely still exists as a company. Most of the off-road carmaker"s assets, namely production halls, 48 hectares of land and the production license, were auctioned off to Landmark Management SRL - Campulung for some 60 million RON two years ago. ARO"s assets were put up for sale shortly after the company became subject to a bankruptcy procedure in mid-2006. Creditors at that time filed claims for approximately 95 million RON.

Following several public auctions, the creditors managed to recover over half of their receivables, as most of the proceeds from the asset sale - approximately 33 million RON - were used to pay largely overdue salaries.

Market sources say that ARO currently has only a few assets left and such assets consist of worker dormitories, which the liquidator is planning to sell in the near future. However, the prospective value of these assets is far below what SIF Oltenia is hoping to collect for the 19.53 per cent in ARO. "The buildings in question are hardly worth 2 million RON, as the plan is to sell them to the existing tenants," the sources told BURSA.

SIF Oltenia representatives could not be contacted for additional information.

ARO - Campulung was privatized in September 2003, when Cross Lander bought approximately 70 per cent in the Romanian off-road carmaker from the Romanian Government for 150,000 USD. Three years later, the privatization contract became the object of a Senate Inquiry Committee, which eventually concluded that the company"s assets had been worth some 50 million USD at the time of sale. According to the Committee"s report "After overdue debts to the State, in the amount of 171,600 RON were wiped off, as per the privatization contract, and after the transfer of ownership over the stock to the buyer, Cross Lander, ARO accumulated new debts to the State, in the amount of 15 million RON."