L_2015203EN.01003101.xml
| 31.7.2015 | EN | Official Journal of the European Union | L 203/31 |
COMMISSION DECISION (EU) 2015/1321
of 23 June 2010
on State aid C 38/07 (ex NN 45/07) implemented by France for Arbel Fauvet Rail SA
(notified under document C(2010) 4112)
(Only the French text is authentic)
(Text with EEA relevance)
THE EUROPEAN COMMISSION,
Having regard to the Treaty on the Functioning of the European Union, and in particular the first subparagraph of Article 108(2) (1) 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 (2),
Whereas:
1. PROCEDURE
1.1. Procedure before the Commission
| (1) | The Commission received a complaint informing it of certain support measures implemented by France for Arbel Fauvet Rail SA (hereinafter ‘AFR’). On 28 January 2006, 25 October 2006, 30 January 2007 and 6 June 2007, France submitted additional information. |
| (2) | By letter dated 12 September 2007, the Commission informed France that it had decided to initiate the formal investigation procedure laid down in Article 108(2) of the TFEU in respect of the measure. |
| (3) | France submitted comments in communications dated 12 October and 18 and 19 December 2007. |
| (4) | The Commission decision to initiate the formal investigation procedure was published in the Official Journal of the European Union (3). The Commission called on interested parties to submit their comments. |
| (5) | The Commission received no comments from interested parties. |
| (6) | On 2 April 2008, the Commission issued a negative ruling on the measures in question (4) and ordered recovery (hereinafter ‘the original AFR decision’). |
| (7) | The original AFR decision was challenged before the Court of First Instance by the Nord-Pas-de-Calais region on 9 July 2008 (Case T-267/08) and by the Communauté d'Agglomération du Douaisis on 17 July 2008 (Case T-279/08). One of the grounds for annulment raised by the applicants was the failure to state reasons with respect to the calculation of the aid element. The applicants also argued that the Commission had committed a manifest error of assessment in mistakenly qualifying AFR as a firm in difficulty. |
1.2. The Biria judgment
| (8) | The calculation of the amount of aid in the original AFR decision of 2 April 2008 was based on a method devised in a previous decision of the Commission in the ‘Biria Group’ case C 38/2005 (hereinafter ‘the Biria decision’) (5). |
| (9) | By proceedings (6) brought on 5 April 2007 (Case T-102/07) and 16 April 2007 (Case T-120/07), the Biria decision was challenged before the Court of First Instance by the authority which had granted the aid and by the legal successor to the aid recipients respectively. On 3 March 2010 (7), the General Court annulled the Biria decision. |
| (10) | Although the Court confirmed to a large degree the reasoning of the Commission, the decision was, nonetheless, annulled for failure to state adequate reasons on a particular point. The General Court held that the Commission could not confine itself to a mere reference to the Commission notice of 1997 for setting the reference and discount rates (8) (hereinafter ‘the Commission notice of 1997 on reference rates’) in the reasons relating to the risk premiums when calculating the amount of the aid element contained in a loan to a firm in difficulty. |
1.3. Withdrawal
| (11) | The original AFR decision made explicit reference to the recital in the Biria decision which prompted its annulment by the General Court. The reasoning in the Biria decision and that in the original AFR decision with respect to the risk premium to be used were based on similar elements. |
| (12) | Consequently, the Commission notes, in the light of the Biria judgment, that the original AFR decision of 2 April 2008 did not provide reasons to the requisite legal standard concerning the level of risk premium to be used. As the decision has yet to become final, there is thus reason to withdraw it and issue a new decision. |
2. AID DESCRIPTION
2.1. Beneficiary
| (13) | AFR is a manufacturer of railway equipment specialising in goods wagons and tank containers. It is one of the leading manufacturers of railway rolling stock on the European market. The company is located in Douai (Nord) and employed around 265 people in 2008. |
| (14) | In 2005, AFR was fully owned by Arbel SA (9). At the time, AFR employed some 330 people. |
| (15) | AFR's business has been running at a loss for several years. The company's economic difficulties worsened from 2001 onwards. This trend gathered momentum between 2002 and 2005. The following table shows some of AFR's key performance indicators for the period before the aid was granted.
| | To 31.12.2004 | To 31.12.2003 | To 31.12.2002 | To 31.12.2001 | | Turnover in EUR | 22 700 000 | 42 700 000 | 42 000 000 | 70 000 000 | | Net loss in EUR | – 11 589 620 | – 14 270 634 | – 2 083 746 | – 10 500 000 | | Capital and reserves in EUR | – 21 090 000 | – 23 000 000 | – 8 700 000 | – 6 600 000 | |
2.2. Support measures
| (16) | On 4 July 2005 the Nord-Pas-de-Calais regional authorities and the Communauté d'agglomération du Douaisis jointly granted AFR a repayable advance of EUR 1 million each, making a total of EUR 2 million. |
| (17) | According to the information provided by the French authorities, the terms of the advances were as follows:
| — | the repayable advance from the regional authorities was granted at an annual interest rate of 4,08 % (equivalent to the Community reference rate applicable at the time) subject to the completion of a financing plan that AFR was drawing up; it was to be repaid in 6-monthly instalments over a 3-year period starting on 1 January 2006, |
| — | the advance from the Communauté d'agglomération du Douaisis was granted at an annual interest rate of 4,08 % (equivalent to the Community reference rate applicable at the time), subject to payment of the advance from the regional authorities, repayable under the same terms, and to supply of proof of the irrevocable merger between AFR and Lormafer, another company controlled by Arbel SA. This advance was also to be repaid in 6-monthly instalments over a 3-year period from 1 January 2006. | |
3. GROUNDS FOR INITIATING THE FORMAL INVESTIGATION PROCEDURE
| (18) | In its decision to initiate the formal investigation procedure, the Commission took the view that the repayable advances constituted state aid within the meaning of Article 107(1) of the TFEU. In this connection, it noted that the advances conferred an advantage on AFR in that the firm, given its financial situation, could not have raised funds on such favourable terms on the financial markets. |
| (19) | The Commission also took the view that AFR was a firm in difficulty within the meaning of the ‘Community Guidelines on state aid for rescuing and restructuring firms in difficulty’ (hereinafter ‘the Guidelines’) (10) and that the compatibility of the state aid it had received needed, therefore, to be assessed in the light of the Guidelines. The Commission was doubtful whether, in the light of the Guidelines, the aid in question was compatible with the internal market. |
4. COMMENTS FROM FRANCE
| (20) | The French authorities claimed that, although AFR was going through a difficult period at the time when the repayable advances were granted and then paid (i.e. July and the second half of 2005), it had maintained the confidence of its customers and bankers. |
| (21) | To support their claims, the French authorities mentioned the following points, which they described as ‘signs of confidence’ in AFR on the part of customers and banks:
| — | […] (11) bank had increased the overdraft facility on AFR's current account by EUR 2 million (guaranteed by […]), |
| — | AFR had received EUR 7 million in advance payments from customers (guaranteed by […]), to which a further EUR 4 million in new advance payments was added in January 2006, |
| — | at the same time, the firm held supplier guarantees worth EUR 4 million with […]. | |
| (22) | The French authorities backed up their comments with documents which show the following:
| — | the overdraft interest rate was 4,4199 % as at 1 July 2005, |
| — | the outstanding amount of the various guarantees (suppliers, contract guarantees, financial guarantees) provided by […] to AFR was EUR 29 million as at May 2005. | |
| (23) | The French authorities also argued that AFR had devised measures ‘for a recovery in its orders, business, operating performance and P&L’. The measures, which were described by the French authorities as a ‘restructuring plan’ were centred on three main areas: (a) a new sales strategy (aimed at achieving better positioning for AFR's products), (b) a reduction in the headcount and (c) a funding and recapitalisation plan. According to the French authorities, the implementation of these measures from 2004 on had brought benefits, leading notably to an increase in turnover (from EUR 22,6 million in 2004 to EUR 45 million in 2005) and an improvement in the bottom line, which remained, however, in the red (net loss down from EUR 11,9 million in 2004 to EUR 8,1 million in 2005). |
| (24) | It should also be noted that in the proceedings filed against the original AFR decision, the applicants mentioned in recital 7 claimed that AFR was not a firm in difficulty at the time when the aid was granted. In this respect, they argue that the Commission made a manifest error of assessment when it did not give sufficient consideration to AFR's |
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