Brussels, 07/06/2001 (Agence Europe) - On Wednesday, the Commission decided to open the formal State aid investigation procedure concerning an asset sale concluded between the receivers of Groditzer Stahlwerke, a steel company located in the German Land of Saxony, and another German steel maker, Georgsmarienhutte (GMH).
Groditzer was privatized and sold to GMH between 1997 and mid-1999. In July 1999, the Commission adopted a negative decision ordering recovery of some DM 240 million. This recovery obligation having rendered Groditzer insolvent, GMH withdrew from the privatization agreement.. BvS (Bundesanstalt fur vereinigungsbedingte Sonderaufgaben), Groditzer's only owner, then entered a new management service agreement with GMH. In July 2000, the Commission decided to open a formal State aid investigation procedure with regard to the obligations contracted by BvS and Groditzer in the management service agreement.
In September 2000, Germany notified an asset sale concluded between the receivers of Groditzer and two subsidiaries of GMH. In order to sell the assets, the receivers of Groditzer conducted a public tender.
The Commission decided to open a formal investigation concerning this asset deal, mainly on the ground that it had doubts whether the sales procedure could be regarded as open, transparent and unconditional. In fact, GMH had been able to integrate Groditzer during the last four years into its group, thereby shaping it to its own needs. This gave GMH the best position to bid for the assets of Groditzer.
Moreover, the information provided by Germany indicated that eight companies had shown an interest in the asset sale. Three bidders had provided a valid bid until the deadline expired. With these three bidders the receivers concluded bilateral negotiations. However, the sale was only finalised after it appeared that GMH was the only remaining bidder offering a valid bid. Consequently, the Commission is seeking further information on whether all interested bidders had had equal possibilities to participate in the bidding procedure.