20 Million Needed to Restore Danubiana’s Fortunes - Tire Review Magazine

20 Million Needed to Restore Danubiana’s Fortunes

(Clacton, U.K./Tyres & Accessories) Gelu Tofan, one of Romania’s most prominent businessmen during the last decade, and the tyre manufacturer he controls, Danubiana, are facing significant financial problems.

The tyremaker’s lack of funds has reached such a serious level that it has had to cease all activity, endangering the company’s distribution activity and the security of its employees.

Tofan and Danubiana have debts amounting to approximately 17 million euros (£11.4 million), including 9 million euros that is owed to banks. Tofan plans to cover this deficit through the sale of real estate assets, including surplus buildings and land the company possesses. Tofan believes 20 million euros are needed to “break the deadlock.”

Danubiana’s poor performance has been attributed to an increased market preference for radial tyres, a product not currently featured in Danubiana’s range. Increased utility costs and changes in exchange rates have also affected the company’s production costs and competitiveness.

During the time activity at Danubiana was halted, the company incurred losses of approximately 9.5 million euros. Tofan hopes to have Danubiana out of its current financial state by the middle of 2007.

 

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