Brussels, 2 July 2013
State aid: Commission opens in-depth inquiry into State measures in favour of Slovak company Novácké chemické závody (NCHZ)
The European Commission has opened an in-depth investigation to verify whether the non-payment of social security contributions and other liabilities due to the Slovak state during the bankruptcy proceedings of NCHZ was in line with EU State aid rules. The opening of an investigation gives interested third parties the opportunity to submit comments; it does not prejudge the outcome of the investigation.
NCHZ was a chemical company in Slovakia with around 2000 employees. In October 2009, the company filed for bankruptcy. In November 2009, Slovakia adopted a law requiring trustees to ensure the continued operation of strategic companies during bankruptcy proceedings. In December 2009, NCHZ was proclaimed by the Government to be a strategic company. The law expired in December 2010 and NCHZ is the only company to which it ever applied.
During the bankruptcy proceedings NCHZ did not pay social security contributions for its employees and other liabilities towards various state entities, as its revenues did not cover its operating costs. After the expiry of the law, the creditors' committee decided to continue NCHZ's operations, although its results continued to be loss making, which led to an accumulation of public debt for the period 2009-2012. In 2012 NCHZ was sold in a tender to Via Chem, a Czech company.
The Commission's preliminary view is that Slovakia protected NCHZ from the results of standard bankruptcy proceedings through the application of the law on strategic companies. There are also indications that the decision of the creditors to continue NCHZ's operations after the expiry of the law was attributable to the State. The Commission will now verify whether any of these measures gave the company an economic advantage over its competitors and therefore constitute state aid. If this is the case, the Commission will then ascertain whether such state aid could be compatible under the EU guidelines on state aid for rescuing and restructuring firms in difficulty.
Moreover, the Commission has doubts whether the NCHZ assets were sold at the market price, which would ensure a maximisation of revenues to satisfy the company's creditors, including the State. An analysis of the sale also indicates that the business was sold as a going concern, including the potential advantages that NHCZ received from the State. As a consequence, if the Commission finds that NCHZ received unlawful state aid, the new owner of the business could be liable to pay it back.
In July 2009 the Commission fined NCHZ EUR 19.6 million for participating in the calcium carbide cartel (see IP/09/1169).
A non-confidential version of today's decision will be made available under case number SA.33797 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.