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EU launches in-depth probe into alleged aid to Belgian glass producer Ducatt

Xinhua, May 20, 2016 Adjust font size:

The competition regulators of the European Union (EU) has opened an in-depth probe to assess whether financial support of in total over 40 million euros granted by the publicly-owned Flemish investment companies to Ducatt NV was in line with EU state aid rules.

Ducatt NV is a Belgian manufacturer of glass for solar panels located in Limburg. It employs around 110 people.

In November 2014, the regulators received a complaint from a competitor alleging that Ducatt NV had been granted illegal financial support by two publicly-owned shareholders, Limburgse Reconversie Maatschappij (LRM) and Participatie Maatschappij Vlaanderen NV (PMV), the European Commission said in a statement released on Thursday.

Between 2012 and 2014, LRM and PMV invested in Ducatt, which has been loss making since its creation in 2010, and provided numerous capital increases and shareholder loans, parts of which were later converted into equity.

In 2015 a recapitalization led to the exit of all existing shareholders except LRM and to the entry of new shareholders. This was accompanied with the restructuring of existing shareholder loans, which were partially written off.

The regulator found that these measures amounted to over 40 million euros in financial support by LRM and PMV.

EU state aid rules only allow public support to companies in financial difficulty if the aid complies with the criteria set out in the EU's Rescue and Restructuring Guidelines, the statement said.

However, it is "unusual" that LRM and PMV not only invested heavily in a company, which has been loss making over five years, but also accepted to convert some loans into equity and to write off others, the regulators doubted.

Therefore, the European Commission decided to investigate further to find out whether its initial concerns are confirmed or not.

The opening of an in-depth investigation would also give interested parties an opportunity to comment on the measures under assessment, the statement stressed. Endit