Brussels, 28/12/2000 (Agence Europe) - The European Commission has decided to open the formal state aid investigation procedure in respect of aid for the restructuring of ZEMAG (Zeitzer Maschinen, Anlagen, Geräte) GMBH, located in Zeitz, Sachsen-Anhalt (Germany). ZEMAG develops and manufactures machinery and plants for the briquetting and processing of gypsum and lignite, used as power station feeders, and for the granulation of dung. The current restructuring of the company was begun in 1997 and is due to conclude once it has been restored to long-term viability in 2001. The aid totals DEM 26.6 million (EUR 13.6 million). The Commission has initiated the procedure because of doubts about compliance with conditions laid down in Community guidelines on state aid for rescuing and restructuring firms in difficulty. The Commission is concerned about the proportionality of the aid, since the private investor contribution appears rather low. It also wishes to obtain additional information on the capacity situation in the relevant market and on the restructuring plan submitted.
ZEMAG used to belong to Lintra-Beteiligungsholding GMBH, a holding company that then comprised eight firms. Lintra's first restructuring plan failed in 1996 and the company was declared in insolvency on 1 January 2000. An investigation opened by the Commission in 1999 concerning aid granted to Lintra Holding is still under way. The final decision the Commission will be issuing soon on Lintra might have an effect on the outcome of the ZEMAG restructuring procedure.