Brussels, 23/01/2003 (Agence Europe) - On Wednesday the European Commission cleared rescue aid of €50 million to MobilCom AG, a German provider of telecommunications services. The aid was granted in September 2002 in the form of a State guaranteed loan. Simultaneously, the Commission initiated formal investigation proceeding on an additional State guaranteed loan of €112 million, which was granted to MobilCom in November 2002. While the Commission considers that the initial loan of €50 million is indeed necessary to keep MobilCom afloat for a transitory period, the German authorities have, at this stage, not been able to demonstrate that the second loan of €112 million is indispensable in this respect.
On 19 September 2002, the German State guaranteed a €50 million loan to MobilCom. The loan itself was paid by State-owned development bank KfW. On 20 November 2002, the German State issued an 80%-guarantee for a new loan amounting to €112 million granted by a consortium of public and private banks. The Commission considers that at the time, the €50 million loan was granted, MobilCom was indeed confronted with declining cash flow, due to the cessation of financial support from its major shareholder, France Télécom (FT). According to the Commission, the "FT's withdrawal plunged MobilCom into an acute liquidity crisis". Under these circumstances the company can be qualified as a firm in difficulty. The Commission found that the "first aid measure qualifies as rescue aid within the scope of the Community Guidelines on rescue aid to a firm in difficulty".
With regard to the further State guarantee on the €112 million loan, the Commission, at this stage, has serious doubts whether this measure can qualify as rescue aid. Its stresses that on the basis of the information submitted by the German authorities, it appears that the second loan was employed not only to cover current expenditure but also to finance a series of restructuring measures. However, as no restructuring plan has been submitted at this stage, the Commission lacks the necessary information to assess whether the additional aid qualifies as restructuring aid under the Community Guidelines. Thus, while the German authorities claim that the two aid measures must be regarded as one rescue aid package, the Commission assessed the measures separately because they are subject to different conditions and appear to serve different purposes. A more thorough assessment of the second aid measure under the Community Guidelines makes the opening of a formal investigation procedure unavoidable.