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   - State aid n° C 6/92 (ex NN 141/91)
   - Sector: metal construction work
   - Italy, CMF SUD SpA and the newly created CMF SpA

   In  March  1992  the Commission decided to open  an  investigation  under
   Article 93(2) EEC in respect of a capital contribution of LIT 32.907  mio
   (22  MECU)  by  the  state owned group  ITALIMPIANTI  to  its  subsidiary
   COSTRUZIONI  METALLICHE FINSIDER (CMF) SUD SpA to offset losses  incurred
   in 1989 and 1990.

   CMF  SUD  designs,  builds  and assembles  metal  construction  work  for
   viaducts  and  bridges,  industrial projects  and  buildings,  and  power
   transmission  lines.  The  company's  head office  and  one  factory  are
   located  at  Guasticce  (Livorno).  A  second  factory  is  situated   at
   Pignataro Maggiore (Caserta).

   As the observations from the Italian authorities within the framework  of
   the  procedure revealed further assistance granted in favour of  CMF  SUD
   SpA, in September 1992 the Commission decided to extend the inquiry into:
   new capital contributions of LIT 45.886 mio (31 MECU) destined to  offset
   the  1991 losses, and an additional capital issue of LIT 15.000  mio  (10
   MECU),  of  which  LIT  14.800 mio was  still  pending  of  subscription,
   destined to reconstruct the company's initial share capital.

   Following  the extension of the procedure, the Italian  authorities  have
   informed  the Commission of certain reorganization actions in  connection
   with CMF SUD SpA, in particular:

   . the setting up by IRITECNA a subholding of the state owned IRI Group of
     a  new company, called CMF SpA to which CFM SUD SpA  will  subsequently
     sell its core business for a price initially fixed at LIT 200 mio;

   . the placing of CMF SUD SpA into voluntary liquidation; and

   . the undertaking by IRITECNA --new CMF SUD's sole shareholder-- to  meet
     all obligations during its liquidation.

   After  a first appraisal, the Commission considers that certain  of  this
   actions, in particular:

   . the  setting-up and provision of capital to the newly created  CMF  SpA
     (2,8 MECU);

   . the  transfer to CMF SpA of the core business of CMF SUD SpA at  an  in
     principle symbolic price (200 MIO LIT); and

   . the  global guaranteeing of the total debts of CMF SUD SpA  during  its
     liquidation (currently estimated at about 44.000 MIO LIT);

   are  likely  to  constitute aid in favour of CMF SUD SpA  and  the  newly
   created CMF SpA.

   The  Commission has therefore decided to extend the  investigation  under
   way to cover these new potential aid elements. The compatibility of these
   new  aid elements, as well as of the aids covered by the initial  opening
   of  the  procedure and its subsequent extension will be assessed  by  the
   Commission in the light of the restructuring programme for the activities
   of  CMF SUD SpA and CMF SpA that the Commission is  currently  discussing
   with the Italian authorities.

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