EC investigates aid by SNCB to Inter Ferry Boats
Brussels, Belgium – The European Commission on 7 december 2005 decided to initiate formal investigation proceedings in respect of aid granted by SNCB to finance the restructuring of its subsidiary Inter Ferry Boats (IFB), in order to verify whether this aid meets the conditions laid down by Community law for State restructuring aid.
Inter Ferry Boats (IFB), a limited company under Belgian law 89.03% of whose capital is held by SNCB, is mainly engaged in the rail transport sector and support activities for that sector, such as the handling and storage of goods, the operation of terminals linked to the rail network and the organisation of freight transport.
In the 2001 and 2002 financial years, IFB recorded significant losses. A long-term structural reorganisation of the undertaking was clearly necessary. To this end, IFB and SNCB concluded a framework agreement on 7 April 2003 which provides for the following measures among others:
– granting of an extension for payment of debts of â‚¬63 million;
– granting of a recoverable advance of â‚¬5 million;
– granting of a credit facility of â‚¬15 million;
– conversion into capital of debts of â‚¬63 million and the loan of â‚¬15 million;
– increase in additional capital of â‚¬5 million through contribution in kind from shares in the company TRW.
Although the restructuring plan should allow IFB to return to profitability, after examining the dossier the Commission cannot exclude at this stage that IFB might have received part of this aid less than three years after its formation and that it would therefore not be eligible for restructuring aid. Moreover, in the absence of a sufficient commitment on the part of Belgium, the Commission doubts that the latter has done all it can to limit the adverse effects of such aid on competition. Finally, IFB does not appear to have contributed to its own restructuring, a requirement laid down by the Community guidelines concerning State aid for the rescue and restructuring of enterprises in difficulty.