Brussels, 02/12/2004 (Agence Europe) - On 2 December the European Commission, as expected (EUROPE 2 December p 12), authorised aid to French IT firm Bull. €517 million in aid for restructuring will be paid only after rescue aid granted in 2001 and 2002 has been reimbursed, which should have been paid back in June 2003. In return for the aid, Bull is to pay the French Government 23.5% of its pre-tax current profits over a period of eight years beginning in 2005.
The Commission's analysis determines that the notified aid should allow the company to become viable again and which according to analysists, now has reserves of EUR 140 million net. Following the sell off of significant parts of its business, the company's market share is very low compares to competitors such as IBM, HP and Sun Microsystems. The Commission stated that this aid is just for what is strictly necessary and does not run into creating surpluses for the Bull group, which could allow it to launch a further buy-out strategy. The plan involved a payroll cut to 7 800 at the end of 2003 and refocusing on the company's strengths: GCOS proprietary servers, IT services linked to its branded products, and development of a new range of open servers. Other elements of the financial plan involves a rights issue launched on the market in June 2004 and underwritten by a group of investors, which brought Bull €44.3 million in fresh capital.