NEW YORK - East European Imports Inc., the company that has struggled for several years to import the Aro sport-utility from Romania, has a new partner.
Worldwide Equipment Corp., a small heavy-equipment company that lost $1.6 million last year, recently acquired a 40 percent stake in Miami-based East European.
Mitchell Hymowitz, CFO of Worldwide Equipment, called his firm a passive investor in East European.
'We believe in it (Aro),' Hymowitz said in a phone interview.
Worldwide, based in Ardsley, N.Y., buys and sells heavy construction equipment. It raised $3.6 million from 41 private investors, at a minimum of $40,000 each, in January, according to records filed with the Securities and Exchange Commission.
According to Worldwide, the deal is structured so that its share of East European will shrink to 20 percent if East European earns $20 million a year in pretax income, or if it is sold for at least $200 million.
In turn, East European said it is raising an additional $4 million in equity.
Brewing for a decade
Laying groundwork for the Aro has been a cottage industry for at least a decade, involving the same handful of individuals. For at least that long, a succession of would-be importers has collected dealer deposits and delivered no vehicles in return.
Over the years, many dealers have quit and demanded their money back, but some dealers seem willing to wait it out.
East European took up the effort to import the Aro in early 1995, promising to deliver vehicles by the end of that year. The company now says it has 170 US dealers signed up, with deposits of $30,000 each.
East European says it will start selling 1,000 vehicles a month by the end of this year.
Yet the company still has not nailed down an engine supplier, or received certification that the Aro meets all US safety and emissions requirements.
A year ago, the company led dealers to believe it had an agreement to buy engines from Ford. But at a dealer introduction in Georgia last summer, the Ford engine turned out to be a homemade assembly made from off-the-shelf parts.
Now the Miami company says the factory in Romania will install Toyota engines in US-bound models.
That claim is also shaky. Toyota Motor Corp. in Japan has sold two engines to the Aro factory in Romania, and has only agreed to supply another 25.