Brussels, 20 March 2013
State aid: Commission approves changes to the restructuring plan of Croatian shipyard Brodotrogir
The European Commission has authorised an amendment to the restructuring plan for Brodotrogir, one of the Croat shipyards in difficulty. Indeed, the distortion of competition that may arise from the modest increase in the total amount of restructuring aid is offset by the additional compensatory measures proposed by Croatia, in line with EU Guidelines on state aid for restructuring companies in difficulty. Moreover, Croatia committed to sign the privatisation contract for the yard within two weeks from the receipt of the Commission decision. This will allow the completion of the privatisation process by 1 July 2013, i.e. the date of accession of Croatia to the EU, as foreseen in the Act of Accession.
Commission Vice-President in charge of competition policy Joaquín Almunia said: "We are making good progress with the Croatian shipyards. After the successful privatisation of Brodosplit, we have now found a satisfactory solution for the restructuring of Brodotrogir. The privatisation of the yard can now go ahead in line with Croatia's commitments. This will enable the new owners of Brodotrogir and its workforce to build a new future”.
In 2011, the Commission and the Croatian competition authority approved a restructuring plan for Brodotrogir, involving HRK 2.8 billion (around €370 million) of restructuring aid. In February 2013, Croatia notified a modest increase in the restructuring costs and a proportional increase in the amount of restructuring aid.
To offset the impact on competition, Croatia proposed to withdraw the possibility for Brodotrogir to trade production quotas with other yards, a mechanism which was allowed by the accession act. In addition, Brodotrogir committed to an individual capacity reduction in line with the accession act. The Commission found that this will ensure a strict limitation of production and a permanent removal of part of the production facilities. The Commission concluded that these additional compensatory measures adequately address the potential distortion of competition triggered by the aid, especially in view of the relatively modest increase of the aid amount.
Moreover, the own contribution of Brodotrogir's buyer to the restructuring is real, free of state aid and after the increase still represents 40% of the total restructuring costs.
Croatia agreed to carry out the restructuring of its shipyards in difficulty through their privatisation on the basis of a competitive tendering process by the date of accession, 1 July 2013. The Brodotrogir shipyard received no bid that complied with the conditions of the tender published in August 2009. After a second round of privatisation, the company Jadranska ulaganja d.o.o. submitted a proposal and its restructuring plan for Brodotrogir was accepted by the Croatian Competition Authority and the Commission in June 2011. In July 2012, Kermas Energija d.o.o. took over the restructuring programme from Jadranska ulaganja d.o.o. by mutual agreement.
The amendment of Brodotrogir's restructuring plan is due to delays in the implementation of the planned restructuring measures resulting from the unsuccessful tenders and from the fact that Kermas took over the restructuring programme from Jadranska ulaganja d.o.o..
This follows a similar Commission decision of February 2013, approving the amended restructuring plan and privatisation contract of the Brodosplit shipyard (see IP/13/134). Following the adoption of the decision on Brodosplit, the privatisation contract for that yard was signed on 28 February 2013.
The non-confidential version of the decision will be made available under the case number SA.36142 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.