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Foundry Daily News

12. March 2008

BAVARIA Industriekapital AG's French subsidiary contemplates selling FONDERIE ALUMINIUM DE CLEON to RENAULT

The aluminium high-pressure die-caster Fonderie Aluminium de Cléon (FAC) owned by BAVARIA Industriekapital AG ("BAVARIA") delivers transmission housings and engine blocks to Renault, PSA and Getrag Ford. BAVARIA acquired the foundry at the end of 2007 as a part of the takeover of three French entities from Teksid SA in Luxembourg. FAC was created in 1964 by Renault on the site of the foundry in Cléon. In 1999, Renault sold its foundries to Teksid, a subsidiary of FIAT in which Renault acquired a share of the capital. The previous Renault foundries were all world leaders in foundry technology.

After successful negotiations between BAVARIA and Renault, the Work Councils of FAC and Renault's plants in Cleon have been informed that Renault intends to revive its aluminium die casting activities in Cléon (FAC) through a dedicated subsidiary company.

Renault plans investments in FAC in order to further improve the competitiveness of the company, which will continue to be based on the existing site. It is also planned to implement the Renault Production System (SPR) to complement the turnaround program already initiated by BAVARIA. Within this framework, Renault will secure employment for the employees of FAC, either on the site of Cléon, or in other production units of the Renault Group, in particular in High-Normandy.

BAVARIA's president of Teksid France, Hans Magnus Andresen, commented: "This is a win-win solution for all parties involved. We acquired three French companies from Teksid, and we quickly determined that two were best fit for a strategic industry owner. We have already sold Metaltemple and now we recommend to our work council in Cleon to endorse this transaction with Renault. The Teksid transaction is another good demonstration of BAVARIA`s turnaround expertise. Last year, the total losses in the French group we acquired from Teksid were 30 mil. Euro. This year, our remaining portfolio company is likely to operate profitably with revenues of around 100 mill. Euro. We are also committed to invest a considerable amount to improve the efficiency of the operations and to support the new customers we have already gained. We are thrilled to have managed this turnaround in less than 6 months and at the same time secured all the jobs in all facilities. Once again, the BAVARIA turnaround model has showed its solidity."

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