2001/1/EC: Commission Decision of 15 February 2000 on the State aid implemented by the Federal Republic of Germany for Dessauer Geräteindustrie GmbH (Text with EEA relevance) (notified under document number C(2000) 515)

• Published date: 04 January 2001
• Date of Signature: 31 January 2001
• Official Gazette Publication: Diario Oficial de las Comunidades Europeas, L 1, 04 de enero de 2001,Journal officiel des Communautés européennes, L 1, 04 janvier 2001,Gazzetta ufficiale delle Comunità europee, L 1, 04 gennaio 2001,Diario Oficial de las Comunidades Europeas, L 66, 08 de marzo de 2001

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2001/1/EC: Commission Decision of 15 February 2000 on the State aid implemented by the Federal Republic of Germany for Dessauer Geräteindustrie GmbH (Text with EEA relevance) (notified under document number C(2000) 515)

Official Journal L 001 , 04/01/2001 P. 0010 - 0020

Commission Decision

of 15 February 2000

on the State aid implemented by the Federal Republic of Germany for Dessauer Geräteindustrie GmbH

(notified under document number C(2000) 515)

(Only the German text is authentic)

(Text with EEA relevance)

(2001/1/EC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Having regard to the Treaty establishing the European Communities, and in particular the first subparagraph of Article 88(2) thereof,

Having regard to the Agreement on the European Economic Area, and in particular Article 62(1)(a) thereof,

Having called on interested parties to submit their comments pursuant to the provisions cited above(1) and having regard to their comments,

Whereas:

I. PROCEDURE

(1) By letter dated 26 May 1998, registered on 29 May 1998 under NN 63/98, Germany informed the Commission of aid for Dessauer Geräteindustrie GmbH (DGI) pursuant to Article 88(3) of the Treaty. By letter dated 23 June 1998, the Commission asked supplementary questions which were answered by letters dated and registered on 7 August and 22 September 1998 respectively. Further information was submitted in letters dated 11 November 1998 (registered on 12 November), 6 December 1998 (registered on 7 December), 18 January 1999 (registered that same day) and 21 January 1999 (registered that same day) and 27 January 1999 (registered on 28 January).

(2) On 18 February 1998 the Commission had received information from Germany, confirmed on 5 March 1999, that the company was facing impending insolvency.

(3) By letter dated 18 May 1999, the Commission informed Germany of its decision to initiate the procedure under Article 88(2) of the EC Treaty in respect of those aid measures. By letter dated 25 June 1999, registered on 29 June, Germany replied to the initiation of the procedure and informed the Commission that insolvency proceedings (Insolvenzverfahren) for DGI had been opened on 30 March 1999.

(4) The Commission decision to initiate the formal investigation procedure was published in the Official Journal of the European Communities(2). The Commission invited interested parties to submit their comments on the aid measures. The comments it received were forwarded by letters dated 22 September and 18 November 1999 to Germany, which was given the opportunity to react.

II. DETAILED DESCRIPTION

A. Recipient

(5) DGI is the legal successor to Dessauer Gasgeräte GmbH. It develops, manufactures and distributes gas and electric stoves (both free-standing and built-in models), gas heating appliances and safety enclosures for electrical equipment. Since December 1994 it has operated as a holding company for four subsidiaries: Dessauer Umform-Oberflächentechnik GmbH, Dessauer Gasgeräte GmbH, Dessauer Schaltschrankbau GmbH and Dessanova Vermögensverwaltungs GmbH.

(6) In 1998 DGI employed 234 people and recorded losses of some DEM 7 million on a turnover of DEM 33,48 million. It qualifies as an SME within the meaning of the Community guidelines on State aid for small and medium-sized enterprises(3).

(7) Its main site is at Dessau, Saxony-Anhalt, where the unemployment rate is 23,7 %. Up to 99 % of the company's sales are in the German market and the remaining 1 % in other EU Member States.

B. Privatisation

(8) In December 1994 DGI was privatised, with retroactive effect from 1 January 1994, after an open, transparent and unconditional competitive tendering procedure. The undertaking was sold for DEM 10 million to the highest bidder, Mr Michael Schröer.

(9) By the end of 1994 turnover had fallen by 60 % and it was agreed that the purchase price would be reduced to DEM 1. In the context of the privatisation, the Treuhandanstalt (THA) took several measures in favour of the company amounting to DEM 71,05 million. These measures were covered by THA scheme E 15/92(4), which had been approved by the Commission.

(10) In addition, during the period from 1993 to 1995, the company received grants amounting to DEM 3,95 million under an approved Federal Government/Länder scheme for improving regional economic structures(5).

(11) On 30 October 1996 Mr Schröer sold 45 % of the shares to Mr Jürgen Franz Berger and 35 % to Mr Lothar Karl Riegel for DEM 1 each, while keeping 20 % of the shares himself.

C. Restructuring

1. Difficulties

(12) The expansion in turnover between 1991 and 1993 was the result of the conversion from city gas to natural gas in the new Länder. Turnover decreased considerably in 1994 as the conversion was completed. In 1995 it fell again by 30 % compared with the previous year. In 1996 the first measures were taken to increase productivity and reduce costs.

(13) A further problem was a technical defect in production which had appeared in 1993, forcing the company to recall stoves it had manufactured(6). The defect in the stoves involved a serious health and safety risk, so remedial action had to be taken immediately. The overall cost of removing defective products comes to DEM 14,55 million. DGI's insurer, Colonia Versicherung AG, will cover 20 % of these costs(7).

(14) In the past the company concentrated on the low-price segment of the market in the new Länder. Its traditional market is saturated and subject to strong competition from cheap suppliers in eastern Europe. DGI intends to establish itself as a supplier of higher-value products, which requires a shift towards the development of modern, high-quality products.

(15) In order to obtain liquidity, DGI sold real estate which was bought by the Bundesanstalt für vereinigungsbedingte Sonderaufgaben (BvS - the successor to the Treuhand privatisation agency) on 13 March 1997 for DEM 5,4 million(8). Of this amount, DEM 4,45 million was paid out and the remaining DEM 0,95 million was used to offset an outstanding claim the BvS had on DGI amounting to DEM 2,88 million. Payment of the remaining debt of DEM 1,93 million was deferred(9). The Commission notes that, in the report on DGI's insolvency...