94/259/ECSC: Commission Decision of 12 April 1994 concerning aid to be granted by Italy to the public steel sector (Ilva group) (Only the Italian text is authentic)
1. The following maximum amounts of aid which Italy plans to grant directly or through its public holding IRI to the Ilva steel group, and in particular to Ilva Residua, may be regarded as compatible with the orderly functioning of the common market provided that the conditions and requirements set out in paragraphs 2 to 5 and in Articles 2 to 6 are met:
(a) a capital injection of Lit 650 billion by IRI into the group;
(b) coverage by IRI of the remaining indebtedness up to a maximum of Lit 2 974 billion. However, if the revenue received from the sale of the undertakings concerned is less than the amounts anticipated, an increase in the residual indebtedness covered by IRI may be accepted provided that it does not exceed the ceiling of Lit 750 billion.
Conversely, if the revenue obtained from such sales exceeds the amounts anticipated, the extra amounts will be used to reduce the indebtedness covered by IRI and thus to reduce the amount of aid;
(c) coverage by IRI of restructuring and liquidation expenditure, up to a maximum of Lit 1 197 billion.
2. The aid has been calculated to enable the undertakings to return to viability by the end of 1994. In the case that such viability is not attained by that date, Italy shall not request any further derogation pursuant to Article 95 of the ECSC Treaty for such undertakings.
3. In addition, such aid shall not be used for the purpose of unfair competition practices.
4. Italy shall comply strictly with its firm pledges to sell 100 % of the capital of the companies being privatized and to carry out such privatization by the end of 1994.
5. Without prejudice to the financing of the privatization and reorganization programme approved by the Commission and described in this Decision, any financing deriving from loans to the undertaking being monitored shall be granted on normal commercial terms. The undertakings in the Ilva group shall not receive debt holidays or friendly treatment of debts to the State.
Italy shall ensure that the Ilva group:
1. closes completely and definitively the hot-rolling mill at Bagnoli;
2. reduces irreversibly by 1,2 million tonnes per year the capacity for producing hot-rolled finished products at Taranto, through the demolition of a reheating furnace at the hot-rolled wide strip mill No 1 and at the heavy plate mill respectively;
3. reduces capacity by 0,5 million tonnes per year either throught the demolition of a reheating furnace at mill No 2 at Taranto or through the demolition of other Italian plant situated elsewhere provided that such plant has manufactured hot-rolled finished products up to the date of privatization and belongs to the new owner of ILP. It shall take place within a period of six months as from the date of the contract of sale;
4. closes the Bagnoli plant by either scrapping it or dismantling it and selling it outside Europe;
5. does not, apart from capacity increases due to productivity gains, increase the remaining production capacity for crude steel and hot-rolled finished products of the undertakings covered by the programme, for a period of five years starting from the date of the last closure or the date of the last payment of aid in respect of investments under the programme, whichever is the later.
1. The acquisition of the undertakings by private investors shall not be financed by State aid. It must be open to all interested parties and must not be subject to discriminatory conditions.
2. The income obtained through the sale of the companies in the Ilva group shall be used in full to reduce the indebtedness of the group.
3. The debts taken over by the new companies Ilva Laminati Piani Srl and Acciai Speciali Terni Srl must at the outset put the levels of their net financing costs at 3,5 % and 3,2 % respectively of annual turnover.
4. The undertakings ILP and AST shall not receive any tax credits on past losses of the Ilva group to be coverd by State aid.
5. The beneficiary undertakings shall carry out all the measures laid down in the programme for the privatization and reorganization of the Ilva group notified to the Commission, in accordance with the timetable contained therein.
1. Italy shall cooperate fully with the following arrangements for monitoring this Decision:
(a) Italy shall supply the Commission twice a year, and not later than 15 March and 15 September respectively, with reports containing full information in accordance with the enclosed Annex on the undertakings covered by the proposals pursuant to
1. The Commission may at any time decide that the reports referred to in Article 4 (1) should be on a quarterly basis if it deems such necessary to fulfil its monitoring tasks. The Commission may at any time decide to mandate an independent consultant, selected with the agreement of Italy, to evaluate the monitoring results, to undertake any research necessary and to report on them to the Council.
2. The Commission may have any necessary checks made in the aided companies in accordance with Article 47 of the ECSC Treaty in order to verify the accuracy of the information given in the reports referred to in Article 4 (1) and in particular compliance with the conditions laid down in this Decision. In the case that a Member State makes a complaint that State aid is enabling one of the companies concerned to under-price, the Commission will initiate an investigation pursuant to Article 60 of the ECSC Treaty in particular.
3. In assessing the reports referred to in Article 4 (1), the Commission will ensure that the requirements of Article 1 (5), in particular, are being respected.
1. Without prejudice to any penalties it may impose by virtue of the ECSC Treaty, the Commission may require the suspension of payments of aid and/or the recovery of aid already paid if, on the basis of the information received, at any time it were to find that the conditions laid down in this Decision have not been met. If Italy fails to fulfil the obligations imposed on it by any such decision, Article 88 of the ECSC Treaty shall apply.
2. Moreover, if the Commission establishes, on the basis of the reports submitted by Italy, that substantial deviations from the financial data, on which the viability assessment has been made, have occurred, it shall request that the reports referred to in Article 4 (1) be provided quarterly, and it may require Italy to take appropriate measures to reinforce the restructuring measures of the aided company.
This Decision is addressed to the Italian Republic.
Done at Brussels, 12 April 1994.
For the Commission
Karel VAN MIERT
Member of the Commission
(1) OJ No L 86, 31. 3. 1989, p. 76.
(2) OJ No L 61, 10. 3. 1990, p. 19.
(3) OJ No L 9, 15. 1. 1992, p. 16.
(4) OJ No L 362, 31. 12. 1991, p. 57.
of the ECSC Treaty. The first report should reach the Commission by 15 March 1994 and the last report by 15 September 1998, unless the Commission decides otherwise;
(b) the reports shall contain full information necessary for the Commission to monitor the implementation of the privatization and reorganization programme and in particular contain all the financial data necessary to allow the Commission to assess whether its conditions and requirements are fulfilled. In addition, the reports shall contain full information in accordance with the Annex, which the Commission reserves the right to modify in line with its experience during the monitoring process. It is up to Italy to oblige the beneficiary undertakings to disclose all relevant data which may, under other circumstances, be considered as confidential.
2. The Commission shall, on the basis of the reports, draw up half-yearly reports, which shall be submitted to the Council not later than 1 May and 1 November respectively, in order to allow discussion in the Council, if appropriate. In particular, if an undertaking which has received aid pursuant to Article 95 of the ECSC Treaty plans to participate in an investment creating or extending capacity, the Commission shall inform the Council on the basis of a report presenting the financing arrangements and demonstrating the absence of State aid.
Supplementary provisions
ANNEXSupplementary provisions
The Commission's information requirements (a) Capacity reductions
- date (or expected date) of cessation of production,
- date (or expected date) of dismantling (1) of the installation concerned,
- where installation is sold, date (or expected date) of sale, identity and country of purchaser,
- sale price;
(b) investments
- details of investments realized,
- date of completion,
- the costs of the investment, the sources of finance and the sum of any related aid involved,
- the date of aid payment;
(c) workforce reductions
- number and timing of job losses,
- the total costs,
- a breakdown of how the costs are being financed;
(d) production and market effects
- monthly production of crude steel and finished products per category,
- products sold, including volumes, prices and markets;
(e) financial performance
- evolution of selected key financial ratios to ensure progress is being made towards viability (the financial results and ratios must be provided in a way allowing comparisons with the company's financial restructuring plan),
- level of financial charges,
- details and timing of aids received and costs covered,
- terms and conditions of any new loans (irrespective of source);
(f) Privatization
- selling price and treatment of existing liabilities,
- disposal of proceeds of sale,
- date of sale,
- financial position of company at time of sale;
(g) creation of a new company or new plants incorporating capacity extensions
- identity of each private and public sector participant,
- sources of their financing for the creation of the new company or new plants,
- terms and conditions of the private and the public shareholders' participation,
- management structure of a new company.
(1) As defined in Commission Decision No 3010/91/ECSC (OJ No L 286, 16. 10. 1991, p. 20).
Source: EUR-Lex (Publications Office of the EU), Β© European Union, reuse permitted under Commission Decision 2011/833/EU.
