Brussels, 08/06/2015 (Agence Europe) - On Monday 8 June, the European Commission decided to authorise Slovenian restructuring aid of €97 million to the manufacturer of automotive components, Cimos. An in-depth investigation opened in April 2014 allowed the Commission to conclude that this restructuring plan would allow Cimos to return to viability in the long term without any further public support and without unduly distorting competition in the single market.
Cimos experienced financial difficulties due to high bank debt that it was unable to repay. Following initial temporary bailout aid of €35 million to Cimos, to give it time to establish a restructuring plan (aid approved by the Commission in July 2013), Slovenia notified the Commission of this plan in November of the same year. This restructuring plan depended on the conclusion of a voluntary restructuring agreement for Cimos' debt with the banks, but the negotiations stalled. This prompted the Commission to open an in-depth investigation, as it had concerns that the plan would fail to return Cimos to viability. Following the breakdown of the negotiations on a voluntary restructuring, a binding transaction procedure was entered into. In October 2014, when an agreement had been reached in that context, Slovenia updated the restructuring plan. This updated plan provides for the Slovenian state banks to restructure Cimos' debt through a debt-for-equity conversion and extending the repayment period. For its part, Cimos undertook to reduce its production capacity by divesting three profitable factories, which will limit the distortions of competition caused by the aid. Finally, Cimos will itself substantially contribute to the costs of restructuring. (Élodie Lamer)