1999/374/EC: Commission Decision of 28 October 1998 on aid granted by Germany to Neptun Industrie Rostock GmbH (notified under document number C(1998) 3435) (Text with EEA relevance) (Only the German text is authentic)

• Articles: 6

Article 1

The loans of a total amount of DEM 34,5 million granted to Neptun Industrie Rostock GmbH (NIR) by the Bundesanstalt fur vereinigungsbedingte Sonderaufgaben (BvS), which are to be waived as from the date of adoption of this Decision, are compatible with the common market, subject to compliance with the conditions set out in Article 5.

Article 2

The guarantee in respect of an amount of DEM 63 million, which was granted on 15 May 1996 by the Land of Mecklenburg-Western Pomerania for NIR and which is to be replaced by a subsequent guarantee of up to DEM 28,1 million as from the date of adoption of this Decision until 31 December 2002 at the latest, comprises an aid equivalent of DEM 20,9 million and is compatible with the common market, subject to compliance with the conditions set out in Article 5.

Article 3

The counter-guarantee in respect of an amount of DEM 8 million granted on 11 March 1997 until the date of this Decision by the BvS for NIR comprises an aid equivalent of DEM 2,4 million and is compatible with the common market.

The possible renewal of this counter-guarantee until 31 December 1998 does not contain aid in view of the fees paid by NIR and the securities to be provided by NIR to the BvS.

Article 4

The regional investment aid of an amount of DEM 1,7 million to be granted for the completion of investments in the NIR company MACOR Neptun is compatible with the common market, subject to compliance with the conditions set out in Article 5.

Article 5

1. The State aid referred to in Articles 1 to 4 may be used exclusively for the rescue and restructuring of NIR, in line with the restructuring plan notified to the Commission. The aid must not be used for, and its benefits must not spill over to, the shipyards Neptun Reparaturwerft in Rostock or Meyer Werft in Papenburg. Until the end of 2001, no other aid shall be paid to the companies of the NIR group undergoing restructuring.

2. Germany shall ensure that:

(a) Neptun Reparaturwerft does not exceed the capacity limit of300000 hours for the repair of merchant ships

(b) no conversion work is carried out on ships falling under the scope of the Community legislation on shipbuilding

(c) the facilities of A& R Neptun Boatservice are not used for the building, conversion or repair of ships falling under the scope of the Community legislation on shipbuilding.

3. Germany shall report on the progress of the restructuring by means of annual reports during the period from 1998 to 2001. The reports will also provide sufficiently detailed information on compliance with the conditions set out in this Article. In addition, Germany shall submit six-monthly production control reports providing information on the activities of Neptun Reparaturwerft.

Article 6

This Decision is addressed to the Federal Republic of Germany.

Done at Brussels, 28 October 1998.

For the Commission

Karel VAN MIERT

Member of the Commission

(1) OJ C 119, 17.4.1997, p. 4.

(2) For final terms, see point IV.6.

(3) This guarantee was later extended several times, see point IV.6.

(4) OJ C 368, 23.12.1994, p. 12.

(5) OJ L 219, 4.8.1992, p. 54 and the preceding "Proposal for a Council Directive providing for changes to the seventh Council Directive on aid to shipbuilding of 21 December 1990" (OJ C 155, 20.6.1992, p. 20.).

(6) OJ L 380, 31.12.1990, p. 27.

(7) The financing institution in question was the venture capital wing of Vereins- und Westbank, a private German bank. The BvS acted in this agreement as a private investor would have done in a similar situation, as it gave up certain rights under the previous privatisation agreement with Bremer Vulkan in return for a share in the proceeds from the sale of the holding of Vulkan Industrie Holding in NIR.

(8) See the Commission Decision of 23 July 1998 on State aid C 7/96 (not yet published). NIR terminated its participation in the cash concentration system by a separate agreement between Bremer Vulkan, NIR and the relevant commercial bank. In the agreement, NIR claims on Vulkan Industrie Holding were set off against Neptun Techno Products liabilities to Vulkan Industrie Holding, so that both companies left the cash concentration system with balanced accounts.

(9) Parts of this text have been edited to ensure that confidential information is not disclosed; those parts are enclosed in square brackets and marked with an asterisk.

(10) See point 6 items 1 to 3.

(11) See Article 7 of Directive 90/684/EEC, which stipulates a 10-year closure period.

(12) See Section II.

(13) See the detailed description in point IV.6.

(14) OJ C 368, 23.12.1994, p. 12.

(15) OJ L 194, 6.8.1996, p. 25.

(16) Fortschreitung der Unternehmenskonzeption "Neptun 2000": this restructuring plan handed over to the Commission at a meeting on 30 June 1997 in Brussels contains the essential elements of the final restructuring plan. It is the first restructuring plan which can be considered feasible within the meaning of the guidelines.

(17) The final business plan dates from 12 November 1997 and was sent to the Commission by Germany by letter dated 8 December 1997.

(18) The guarantees in question are shortfall guarantees. The guarantor has to meet the shortfall after liquidation of all collateral securities. The collateral securities provided are mortgages on all real properties belonging to NIR. In its analysis, the Commission estimated the default risk on the basis of the value of the collateral securities, based on assessment of the value of the property. It came to the conclusion that the collateral securities, which had a book value of some DEM 144 million at the end of 1995, would not have been sufficient to repay all loans (some DEM 115 million) from the proceeds of a forced sale of the property. A shortfall in the range of 30 % could have been expected in the two-year guarantee period. This 30 % shortfall on the amount of the guarantees corresponds to an amount of DEM 21,3 million.

(19) As mentioned in the guidelines, the Commission will consider favourably an extension of the rescue aid until its investigation is completed.

(20) See point IV.8.