The Romanian Government is selling its 70% stake in national aerospace company Aerostar to a private consortium, Aerostar-PAS-IAROM, for Leu 60 billion ($3.2 million). The value of the purchase could increase to Leu 100 billion over the three years it will take to complete, allowing for inflation.

The consortium consists of Aerostar managers and employees (PAS) and IAROM, a company created by Bucharest in 1989 to oversee strategic development of the aerospace industry, although it has since been privatised.

The state retains a "golden share", allowing it to veto decisions affecting Aerostar's defence production capability. Of the remaining Aerostar shares, 12% are held by the SIF Moldova investment company, while 18% are traded on the Bucharest stock exchange.

Under the terms of the contract, Aerostar-PAS-IAROM will assume the company's debts, maintain it as a going concern for at least 10 years and retain its core businesses for at least five. It will also provide a capital increase of $1.4 million over three years for investment in production equipment and new products.

The consortium hopes to attract additional investment from private financiers and international strategic partners. Aerostar already collaborates with Elbit Systems of Israel through the A-E Electronics joint venture and with France's Thomson-CSF through AeroThom Electronics.

Source: Flight International