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Commission is investigating state aid in Cimos

The European Commission has announced that it is launching an in-depth investigation regarding the  state aid in the amount of 35 million euros for the Slovenian manufacturer of automotive parts Cimos. The Commissions’ assessment will be focused primarily on whether the planned aid will enable Cimos to become viably without continued public support and whether the owners sufficiently contributed to the costs of restructuring.

In July 2013, Commission temporary approved the state aid for Cimos in the form of state guarantees for bank loans in the amount of 35 million euros, while Slovenian authorities committed to notify a restructuring plan that would ensure long-term viability for the company. Slovenia submitted the restructuring plan to the Commission in November 2013.

Regarding this plan, the Commission has doubts ” whether the restructuring plan complies with the requirements of the 2004 EU Rescue and Restructuring Guidelines. The Commission further doubts about an adequate contribution of the owners to the costs of restructuring, some Slovenian assets appear as companies’ own contribution to the restructuring, which could counts as additional state aid, furthermore the forecasts of the company’s long-term viability may not be realistic.

The group Cimos is with approximately 7,000 employees, one of the biggest Slovenian producer, most active in the production of components for the automotive industry. Last year the company plunged into severe financial difficulties, mainly due to liquidity problems associated with its bank debt, which the group is not able to repay by itself.

Sources:

http://europa.eu/rapid/press-release_IP-14-399_en.htm

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