LJUBLJANA (Slovenia), April 9 (SeeNews) – The European Commission said on Wednesday it has launched an in-depth investigation to assess if 35 million euro ($48.3 million) of restructuring aid for Slovenian manufacturer of car components Cimos Group complies with the EU state aid rules.
“The Commission will examine in particular whether the planned aid will enable the company to become viable without continued public support and whether the company owners contribute sufficiently to the cost of restructuring, “ it said in a statement.
The in-depth investigation gives interested third parties an opportunity to comment on the measures under scrutiny, but it does not prejudge the final outcome of the investigation.
In July 2013 the European Commission temporarily approved a 35 million rescue aid guarantee for Cimos, after the company experienced financial difficulties resulting mainly from liquidity problem linked to considerable bank debt, the Commission explained.
The rescue aid was subject to a commitment by Slovenia to submit a restructuring plan aimed at ensuring the long-term viability of the company.
In November 2013, Slovenia notified the restructuring plan in the form of a debt-to-equity conversion of the state's claim against the company resulting from the rescue aid guarantee. According to Slovenian authorities the aid would restore long-term viability of Cimos by improving its liquidity and help to implement operational restructuring measures aimed at reducing costs and increasing productivity, the Commission said.
However, the Commission has doubts whether the restructuring plan complies with the requirements of the 2004 EU Rescue and Restructuring Guidelines and is particularly concerned that Cimos’ owners may not sufficiently contribute to the restructuring cost.
“Some funding notified by Slovenia as own contribution by the company may actually come from state resources and involve additional state aid. Furthermore, the forecasts of the company's long-term viability may not be realistic and the proposed capacity reduction may not be adequate to compensate for the distortions of competition.”
($=0.7251 euro)