(BRUSSELS) – The EU opened an in-depth probe Thursday to assess whether EUR 40m of financial support granted by publicly-owned Flemish investment companies LRM and PMV to Belgian producer of glass for solar panels Ducatt was in line with EU state aid rules.
The Commission received a complaint in November 2014 from a competitor alleging that Ducatt NV had been granted illegal financial support by two publicly-owned shareholders, Limburgse Reconversie Maatschappij(LRM) and Participatie Maatschappij Vlaanderen NV (PMV).
Between 2012 and 2014 LRM and PMV invested in Ducatt, which has been loss making since its creation in 2010, and provided numerous capital increases and shareholder loans, parts of which were later converted into equity. In 2015 a recapitalisation led to the exit of all existing shareholders except LRM and to the entry of new shareholders. This was accompanied with the restructuring of existing shareholder loans, which were partially written off. Together, these measures amount to over 40 million in financial support by LRM and PMV.
State interventions in companies are seen as free of state aid within the meaning of the EU rules when they are carried out at conditions that a private investor operating at market conditions would have accepted.
The Commission takes the preliminary view that no private investor would have accepted to act in the same way as LRM and PMV, who not only invested heavily in a company, which has been loss making over five years, but also accepted to convert some loans into equity and to write off others.
EU state aid rules only allow public support to companies in financial difficulty if the aid complies with the criteria set out in the Commission’s 2014 Rescue and Restructuring Guidelines. This requires in particular that the company is subject to a sound restructuring plan, which would allow it to return to viability in the long-term without continued state support and without unduly distorting competition in the Single Market.
The Commission will now investigate further to find out whether its initial concerns are confirmed or not. The opening of an in-depth investigation gives interested parties an opportunity to comment on the measures under assessment. It does not prejudge the outcome of the investigation.
Ducatt NV is a Belgian manufacturer of glass for solar panels located in Limburg. It employs around 110 people.
The Commission says the non-confidential version of the decision will be made available under the case number SA.39990 in the State Aid Register on the DG Competition website once any confidentiality issues have been resolved. New publications of state aid decisions on the internet and in the Official Journal are listed in the State Aid Weekly e-News.
