IP/02/1071
Brussels, 17 July 2002
Commission approves privatisation and restructuring plan for Société Française de Production
The European Commission today decided not to raise any objections to the privatisation and restructuring plan for Société Française de Production (SFP). The plan provides for state financing of social measures for the workers laid off. Such measures, which are designed to reduce the adverse effect of redundancies without relieving the undertaking of its usual costs, are part of the social policy of the Member States and do not constitute aid within the meaning of the EC Treaty. SFP, which is wholly owned by the State, is a public undertaking in the audiovisual production sector (sets and studios, machinery, vision and sound, special effects, etc.)
Since the audiovisual production sector was opened up to competition in 1986, SFP has been through several crises, and the public authorities have intervened more than once to help it restructure and redeem its debts. Last November, the French authorities informed the Commission of their intention to sell SFP to a private investor, selected after a transparent and non-discriminatory award procedure, for about EUR 4.57 million (FF 30 million). The restructuring plan proposed by the buyer provides for the layoff of about 70% of SFP's workforce. The buyer will pay the cost of compulsory redundancy payments (EUR 5.3 million), while the public authorities will finance the additional social measures for those laid off (EUR 43.1 million).
The Commission has found that the State will finance only social measures for the workers laid off and is not relieving the firm of the costs which it normally has to bear as a result of its legal and contractual obligations. In the circumstances, the Commission considers that the social plan financed by the State does not include state aid for SFP.
The Commission's scrutiny of the plan has shown that:
- the debt write-off granted by a public undertaking to SFP is in fact associated with a long-running dispute which the two companies have tried to settle on several occasions, but to which they still seek a definitive solution. Since the outcome will be settled in accordance with French commercial law, applying the appropriate private law procedures, the Commission considers that the transaction does not include an aid component;
- the price for SFP was determined at the end of a large-scale tendering procedure, in which the largest actors in the audiovisual sector (58 French and foreign companies) were invited to take part and the most favourable bid was accepted. Consequently, it does not contain an aid component;
- the hiring of about 100 SFP workers by firms in the public audiovisual sector is a common commercial practice. In the same way that private firms wishing to lay off some of their workforce must explore all possibilities of redeploying workers in other firms in the same group (Article L 321-1 of the Labour Code), undertakings in the public audiovisual sector are, depending on their needs, offering vacancies to SFP workers. These redeployment measures are not caught by Article 87(1) of the EC Treaty.
To sum up, examination of the notified plan has not revealed any state aid for SFP. The Commission has therefore decided not to raise any objections to it.
