Nomura International has bought 49 per cent of Romania's biggest tyre producer, the privately owned Tofan Grup SA.
Gheorghe Tofan, President and Chief Executive of Tofan Grup, said he signed a deal to have Nomura International invest $60 million in Tofan. The contract between Nomura and Tofan Grup stipulates that Nomura will also arrange loan facilities of $40 million for Tofan.
"It's the biggest one-shot direct investment in both the private and state industry in Romania so far," Tofan said in a telephone interview.
Nomura International associate director Declan Walsh confirmed the deal and its significance as part of foreign investments in Romania.
Tofan said Nomura's investment, the biggest so far in a Romanian private company, gives Nomura 49 per cent of Tofan Grup's share capital. The association with Nomura will be used to upgrade and develop Tofan Grup's performances.
Tofan Grup has 12,000 employees and in 1996 recorded a net profit of 5 billion lei. It is a privately held Romanian company founded by Gheorghe Tofan in 1993 as a distributor of tyres in Romania. In 1996 it bought state-owned tyre maker Danubiana SA, followed by the purchase of two more state-owned tyre makers, Victoria and Silvania. It has a current annual production of about 2.5 million tyres. It is the 26th largest tyre company in the world by net sales.
"Nomura invests in tyre producer." Finance East Europe 11 July 1997: Vol. 7, Iss. 13; pg. 17.