Brussels, 21/12/2006 (Agence Europe) - The European Commission has approved under EC Treaty state aid rules €17.3 million of restructuring aid in favour of Huta Stalowa Wola (HSW), a Polish industrial machinery company. After an in-depth investigation initiated in November 2005 (EUROPE 9075), the Commission concluded that the measures are limited to the minimum necessary and do not create undue distortions of competition.
HSW is not a steel producer and therefore fulfils the conditions for benefiting from restructuring aid. The Commission believes that this in the company's favour, given the concern of the latter to prevent over-production in the steel sector (EUROPE 9322 on the Commission's reaction to the use of the State Aid by Arcelor Huta Warszawa).
On 8 October 2004, Poland informed the Commission about measures granted to support the restructuring of HSW. The Commission's examination showed that some aid was granted before Poland's accession to the EU (PLN 157 million or €41.2 million), and some after accession (PLN 66 million or €17.3 million). The Commission has no competence to assess the compatibility of aid granted before accession. These measures have, however, been taken into account in the general aid assessment.
HSW has modified its organisational structure by sub-contracting and selling off some of its units. It has also launched into a broad industrial and financial restructuring process aimed at making its activities more effective.
The Commission said measures taken were in line with the conditions set by the Community guidelines on State aid for corporate restructuring and rescue and, in particular, that the restructuring plan allowed the long-term viability of HSW to be restored. It also felt that the aid was kept to a strict minimum as the private sector provided a large contribution (over 50%) towards the cost of restructuring. Furthermore, state aid measures will not unduly distort competition, as HSW has sold a number of profitable subsidiaries, which restricts the scope and importance of its activities. Neelie Kroes, Commissioner in charge of competition, said she was convinced the aid is used to enhance the company's effectiveness and will not create additional market capacity. (cd)