2002/825/EC: Commission decision of 24 April 2002 on the State aid implemented by Belgium for the Beaulieu Group (Ter Lembeek International) (Text with EEA relevance.) (notified under document number C(2002) 1341)

• Articles: 4

Article 1

The State aid which Belgium has implemented for the Beaulieu Group (Ter Lembeek International) in the form of the waiver of a debt of BEF 113712000 is incompatible with the common market.

Article 2

1. Belgium shall take all necessary steps to recover from the beneficiary the aid referred to in Article 1 and unlawfully made available to the beneficiary.

2. Recovery shall be effected without delay and in accordance with the procedures of national law provided that they allow the immediate and effective execution of the Decision. The aid to be recovered shall include interest from the date on which it was at the disposal of the beneficiary until the date of its recovery. Interest shall be calculated on the basis of the reference rate used for calculating the grant equivalent of regional aid.

Article 3

Belgium shall inform the Commission, within two months of the date of notification of this Decision, of the measures taken to comply with it.

Article 4

This Decision is addressed to the Kingdom of Belgium.

Done at Brussels, 24 April 2002.

For the Commission

Mario Monti

Member of the Commission

(1) OJ C 313, 8.11.2001, p. 2.

(2) OJ L 320, 5.12.2001, p. 28.

(3) OJ C 29, 4.2.1999, p. 13.

(4) See footnote 1.

(5) OJ L 312, 9.11.1982, p. 18.

(6) OJ C 83, 24.3.1993, p. 3.

(7) By agreement of 18 December 1996, SA Ter Lembeek International bought the following holdings from Sowagep (the management company for the holdings of the Walloon Region in commercial firms): Verlipack Ghlin SA: 5087 non-voting preferential shares and 3937 Category I profit shares; Verlipack Jumet SA: 2923 non-voting preferential shares and 2267 Category I profit shares. The agreement stipulated that the price of BEF 113712000 was payable "on 31 December 2001, net-net, without interest".

(8) This holding company owns the following subsidiaries Beaulieu Wielsbeke NV, Goed Ter Lembeek NV, Cefima NV, Verlico NV, Der Grüne Teppich GmbH, Beja Textil Lda, Beaulieu Service Centre Moskau, Datex NV, Beaulieu Kunstoffen NV, Chemical Finance Company, De Steenhout NV and Verlipack Holding NV.

(9) In "full knowledge of the statutes and financial situation of Verlipack Holding II".

(10) Supplementary agreement of 20 November 1998 to the transfer agreement of 18 December 1996 between the Walloon Region and the Beaulieu Group on the acquisition of 14214 shares.

(11) Response to the initiation of the formal investigation procedure resulted in the decision of 4 October 2000 (page 24).

(12) In the context of the procedure resulting in the decision of 16 September 1998, subsequently revoked.

(13) "Given the firm's difficulties and the desire on the part of its private shareholders and bankers to provide Verlipack with new finance, the Walloon Region had agreed in principle to participate on certain conditions in a BEF 100 million capital increase. [...] The Walloon Region would point out that it will not implement the project without prior notification to the Commission and without authorisation. At present, the project is tending towards the granting of a BEF 100 million long-term loan on the same terms as applied to Verlipack by the banks. The Walloon Region will ensure that it contacts the Commission again once the conditions in finalising such a project have been met. [...] Finally, Verlipack's management has announced that the initial results for 1998 point to the start of an improvement."

(14) OJ L 83, 27.3.1999, p. 1.

(15) It should be noted that the Annex 5 in question does not relate to the transfer of shares held by the Beaulieu Group to the Walloon Region but rather to an exchange of shares between Worldwide Investors and the Beaulieu group.

(16) As it happened, bankruptcy was not declared even though, since its purpose had lapsed, the company was destined merely to be put into liquidation. The Walloon Region indicated that it did not intend to pursue recovery of the amounts owed to it (and, in so doing, granted a credit to its debtor). When questioned on this point at the time the procedure was initiated, the Walloon Region confirmed that, as a result of the adoption of the negative decision of 4 October 2000, it had instructed Verlipack Holding II to repay the state aid. Following this, the Mons Commercial Court, by judgment of 19 February 2001, declared Verlipack Holding II bankrupt after the latter had, on the same date, filed for a suspension of payments.

(17) The Beaulieu in 2000 group is the leading European carpet manufacturer and exports 98 % of its production.

(18) For example, in 2000 Associated Weavers, a manufacturer established in Belgium, sold 48,7 million m2 of carpeting for a total turnover of EUR 212,89 million, which makes it one of the largest European manufacturers in the sector. According to the data published on its website (http://www.awe.be/ (14 march 2002), it exports its products throughout the world, but predominantly to Europe.

(19) Royal Decree concerning the issuing of non-voting preferential shares by limited companies in national sectors (Moniteur Belge of 11 May 1985). The shares in question were non-voting shares which could be subscribed to in companies undergoing restructuring by: (1) Société nationale d'investissement; (2) Société nationale pour la Restructuration des Secteurs nationaux; (3) Fonds voor de herstructurering van de nationalen sectoren in het Vlaamse Gewest; (4) Fonds pour la restructuration des secteurs nationaux en Région wallonne; (5) limited liability companies ("sociétés anonymes") in which Société nationale d'investissement holds at least 50 % of the capital, provided that they are authorised to do so by decree of the Minister for Economic Affairs.

(20) This letter was in reply to the Commission's letter of 5 July 2000 (p. 5).

(21) See the first recital of the ruling by the Mons Commercial Court of 31 May 1999.

(22) See footnote 21 (p. 5).

(23) The agreement of December 1996 stipulated that the price of BEF 113712000 was payable 'on 31 December 2001, net-net, without interest'.

(24) Moreover, in the context of the injunction issued to Belgium, the Walloon authorities' legal counsel approached the legal counsel of the Beaulieu Group in order to obtain information for a reply to the injunction. Belgium did not pass on any reply from the Beaulieu Group or its legal counsel. In addition, neither the Beaulieu Group nor its legal counsel has come forward in the context of this procedure.

(25) Second recital to the ruling by the Mons Commercial Court of 31 May 1999.

(26) OJ C 74, 10.3.1998, p. 9.

(27) Letter from the Commission to the Member States (SG (91) D/4577 of 4 March 1991). See also the judgment of the Court of Justice of 21 March 1990 in Case C-142/87 Belgium v Commission ECR [1990] I-959.