Brussels, 25/07/2006 (Agence Europe) - The European Commission has authorised two loans to the Dutch recyclable waste collection company VAOP (Vereniging van Aanbieders van Oud Papier”) or Association of Suppliers of Waste Paper), created by several Dutch municipalities (“gemeenten”) to organise the collection and sale of different types of recyclable waste. On the basis of an in-depth-investigation opened in May 2005, the Commission has concluded that the loan granted by BNG in 1998 and the loan granted in 2001 by the municipalities which were members of VAOP, did not constitute state aid.
The Commission concluded that the loan granted by BNG in 1998 conformed to market conditions and does not constitute state aid as BNG had requested adequate securities from VAOP. In addition, at that time a privately owned bank was ready to provide similar financing to VAOP, which was considered to be a growing company offering good prospects. Finally, the interest rate charged by BNG is close to the one proposed by the private bank.
The Commission pointed out that second loan granted by the municipalities which had certain financial claims against VAOP transformed part of these claims into a subordinated loan. The Commission found that this partial transformation constituted the best alternative available to the municipalities. Indeed, were VAOP to have gone bankrupt, they could have expected to recover only a very limited part of their claims, as BNG had rights (“pandrecht”) to nearly all of VOAP's assets to cover the company's debts towards BNG.
Competition Commissioner Neelie Kroes said: “The investigation has brought forward evidence that BNG and the municipalities concerned have acted as normal economic operators. Their lending to VAOP therefore does not constitute state aid.”