Brussels, 14 April 2010
State aid: Commission opens in-depth investigation into €9.8 million debt rescheduling for Bulgarian company Ruse Industry
The European Commission has opened an in-depth investigation into plans by Bulgaria to reschedule a debt of €9.8 million owed to the State by Ruse Industry AD, a manufacturer of metal structures and elements. The Commission has doubts that the proposed measure is in line with EU rules on rescue and restructuring aid. The opening of an in-depth investigation allows interested parties to comment on the measure under assessment. It does not prejudge the outcome of the procedure
“We have to make sure that the measure planned in favour of Ruse Industry complies with the rules on restructuring aid, in particular that the company is viable in the long-term and that the aid does not adversely affect competition,” Competition Commissioner Joaquín Almunia said.
On 30 June 2009 the Bulgarian authorities notified the Commission of plans to restructure the debt of Ruse Industry AD, a company that produces metal structures and elements. The proposed measure consists of the deferral and rescheduling of public debt amounting to €9.8 million. The debt owed to the Bulgarian State dates before the accession, in 2007, of the country to the European Union. The origin of the debt, therefore, is not subject to the investigation. But subsequent subsidies involved in the rescheduling of the debt needs to comply with the rules.
At this stage, the Commission has doubts that the proposed measure fulfils the conditions set out in the EU guidelines on State aid for rescuing and restructuring firms in difficulty: for this to happen the long-term viability of the company needs to be demonstrated, appropriate compensatory measures must be taken to counterbalance competition distortions and the company has to contribute to the restructuring in an appropriate manner.
In addition, the Commission has concerns whether Ruse Industry is eligible for restructuring aid at all, especially in light of the rule that rescue and/or restructuring aid can be paid out to a company only once every ten years (the "one-time-last-time" principle). This is to avoid ailing companies being kept artificially alive through continued state support. In the present case, it appears that Ruse Industry already benefitted from an earlier rescheduling of its public debt that could constitute state aid.
The non-confidential version of the decision will be made available under the case numbers C xx/2010 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.
This is the first time the Commission opens an in-depth investigation on a Bulgarian state aid case. According to the Commission Guidelines on state aid for rescuing and restructuring firms in difficulty (see MEMO/04/172), a restructuring measure has to fulfil certain conditions to be approved by the Commission: If the Commission has doubts about the proposed measures, it opens an in-depth investigation. This allows interested parties to comment on the measures. The Commission will terminate its investigation with a final decision, which may be positive, negative or conditional.