EN Official Journal of the European Union L 357/1

COMMISSION DECISION

of 20 November 2013

concerning the State aid SA.16237 (C58/02) (ex N118/02) implemented by France in favour of SNCM

(notified under document C(2013) 7066)

(Only the French text is authentic)

(Text with EEA relevance)

(2014/882/EU)

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) thereof (1),

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

Having called on interested parties to submit their comments pursuant to those articles (2), and having regard to their comments,

Whereas:

I. PROCEDURE

(1) On 18 February 2002, France notified the Commission of planned restructuring aid for Société Nationale Maritime Corse-Méditerranée (hereinafter: ‘SNCM’), which notification was supplemented on 3 July 2002 (3). The restructuring plan followed the notification by the French authorities on 20 December 2001 of a cash advance of EUR 22,5 million granted by Compagnie Générale Maritime et Financière (hereinafter: ‘CGMF’) (4) to SNCM as rescue aid. By decision of 17 July 2002 (5) (hereinafter: ‘the 2002 decision’), the Commission authorised rescue aid in favour of SNCM under the preliminary examination procedure for aid laid down in Article 88(3) of the EC Treaty. The notified restructuring aid consisted in the recapitalisation of SNCM through CGMF to the tune of EUR 76 million.

(2) By letter of 19 August 2002, the Commission notified the French authorities of the decision to initiate the formal investigation procedure (6) pursuant to Article 88(2) of the EC Treaty and Article 6 of Council Regulation (EC) No 659/1999 (7).

(3) On 8 October 2002 (8), the French authorities communicated to the Commission their comments on the decision of 19 August 2002 (9).

(4) At the request of the French authorities, meetings were organised with the Commission on 24 October 2002, 3 December 2002 and 25 February 2003.

(5) In the context of initiating the procedure, the Commission received observations from two undertakings, namely Corsica Ferries France (hereinafter: ‘CFF’) on 8 January 2003 (10) and STIM d’Orbigny group STEF-TFE (hereinafter: ‘STIM’) on 7 January 2003, and from various French regional and local authorities on 18 December 2002 and 9 and 10 January 2003. It sent those observations to France for comment by letters of 13 and 16 January and 5 and 21 February 2003.

(6) The French authorities submitted their comments on the observations by CFF and STIM on 13 February (11) and 27 May 2003 (12).

(7) On 16 January 2003, the Commission sent a request for additional information, to which the French authorities replied on 21 February 2003.

(8) By letter of 10 February 2003 (13), the French authorities expanded their arguments seeking to demonstrate that the planned aid complied in every respect with the Community Guidelines on State aid for rescuing and restructuring firms in difficulty (14) (hereinafter: ‘the 1999 guidelines’).

(9) At the Commission’s request, on 25 February 2003 (15) the French authorities forwarded a copy of the shareholders’ agreement binding SNCM and STIM.

(10) By Decision 2004/166/EC (16) (hereinafter: ‘the 2003 decision’), the Commission approved, under certain conditions, the granting of restructuring aid to SNCM payable in two instalments, one of EUR 66 million and the other for a maximum amount of EUR 10 million, to be determined on the basis of the net proceeds resulting from asset sales made after the adoption of the 2003 decision. The payment of the first instalment was authorised by the 2003 decision.

(11) On 13 October 2003, CFF brought an action for annulment of the 2003 decision before the General Court of the European Communities (hereinafter: ‘the General Court’) (Case T-349/03).

(12) By Decision 2005/36/EC (17) (hereinafter: ‘the 2004 decision’), the Commission decided that the amendments requested by France on 23 June 2004, namely swapping the vessel Aliso with the vessel Asco in the list of vessels which SNCM was authorised to use following the 2003 decision and the sale of the Aliso instead of the Asco, were not such as to call into question the compatibility with the internal market of the restructuring aid authorised by the 2003 decision.

(13) By decision of 16 March 2005 (hereinafter: ‘the 2005 decision’) (18), the Commission approved the payment of the second instalment of restructuring aid, in the amount of EUR 3,3 million, which brought the total amount of authorised restructuring aid to EUR 69,3 million.

(14) On 15 June 2005, in Case T-349/03 (19), the General Court annulled the 2003 decision on the ground that the minimal character of the aid had been incorrectly assessed.

(15) On 25 October 2005 (20), the French authorities sent the Commission information relating to the financial situation of the company since the notification of the planned restructuring aid on 18 February 2002.

(16) On 17 November 2005 (21), the French authorities provided information on the updating of the 2002 restructuring plan and the reconstitution of SNCM’s own capital (22).

(17) On 15 March 2006, a briefing note on the market, the business plan (revenue part) and the projected income statement were submitted to the Commission by the French authorities (23). Other documents were delivered to the Commission on 28 March 2006 and 7 April 2006 (24). In the letter dated 7 April 2006, the French authorities also called on the Commission to classify part of the 2002 restructuring aid, in particular the amount of EUR 53,48 million, not as a measure taken under a restructuring plan but as non-aid in accordance with the Altmark (25) case-law or as an autonomous measure independent of the restructuring plan pursuant to Article 86(2) of the EC Treaty, on account of its being ‘public service compensation’.

(18) On 21 April 2006, a planned merger, under which the undertakings Veolia Transport (hereinafter: ‘VT’) (26) and Butler Capital Partners (hereinafter: ‘BCP’) acquired joint control of SNCM (27), was notified to the Commission pursuant to Article 4 of Council Regulation (EC) No 139/2004 (28). By decision dated 29 May 2006 (29), the Commission decided not to oppose the notified operation and to declare it compatible with the internal market.

(19) On 21 June 2006 (30), the French authorities sent the Commission the Order of 26 May 2006 of the Ministry of Economic Affairs, Finance and Industry approving financial transactions decided by Société nationale des chemins de fer français (hereinafter: ‘SNCF’) and Decree No 2006-606 of 26 May 2006 transferring SNCM to the private sector.

(20) Information concerning the public service delegation and aid having a social character relating to the operation of services to Corsica was sent to the Commission on 7 June 2006 (31).

(21) By letter dated 13 September 2006, the Commission notified the French authorities of its decision to initiate the formal investigation procedure laid down in Article 88(2) of the EC Treaty and in Article 6 of Regulation (EC) No 659/1999 concerning the new measures implemented in favour of SNCM and the restructuring plan notified in 2002 (32) (hereinafter: ‘the 2006 decision’).

(22) On 16 November 2006, France sent the Commission its comments on the 2006 decision (33).

(23) On application by a number of interested parties to extend the time-limit for submitting comments by 1 month (34), the Commission decided to grant that additional period to all interested parties (35).

(24) The Commission received comments from CFF (36) and STIM (37) which were forwarded to the French authorities by letter dated 20 February 2007. A third party also sent comments which were also forwarded to the French authorities, and withdrawn by that party on 28 May 2008.

(25) The French authorities sent their observations on the comments by the interested third parties on 30 April 2007 (38).

(26) On 20 December 2007, CFF lodged a complaint against SNCM with the Commission which supplemented the information sent on 15 June 2007 and 30 November 2007. That complaint concerns Article 3 of the new public service delegation agreement signed in June 2007 between the Corsican regional authorities and the Compagnie Méridionale de Navigation-SNCM joint venture for 2007 to 2013. According to CFF, the application of that clause would mobilise new financial resources for SNCM in the region of EUR 10 million for 2007. Furthermore, it stated that the compensation paid to SNCM in respect of public service obligations is State aid which is, moreover, unlawful since it has not been notified to the Commission.

(27) The Commission informed the interested parties of its decision to extend the period for them to submit comments to 14 March 2008.

(28) On 26 March 2008, the Commission forwarded the comments by the interested third parties to France, which communicated its observations on 28 March, 10 April and 28 April 2008.

(29) By decision dated 8 July 2008, the Commission took the view that the new measures in 2006 did not constitute State aid within the meaning of Article 87(1) of the EC Treaty and that the measures notified in 2002 were aid compatible with the internal market.

(30) This decision was partially annulled on 11 September 2012 by the General Court (39), which found that the Commission’s conclusions on the measures implemented in 2006 were vitiated by manifest errors of assessment. The General Court held that the Commission’s analysis of the 2002 restructuring aid should be reviewed because the decision was based on the fact that the 2006 measures were free of aid.

(31) The only aid in respect of which the finding of compatibility was not annulled is the EUR 53,48 million as compensation for SNCM’s public service obligations for the period 1991-2001. Consequently, this point will not be addressed in this decision.

(32) The Commission must therefore adopt a new final decision. There is no need to examine facts subsequent to the date of adoption of the annulled decision. Following the annulment, the Commission is required, first, to evaluate whether certain of the measures in question are consistent with the behaviour of a private investor in a market economy and, second, as far as the measures examined constitute State aid, whether the compatibility conditions laid down by the guidelines are met. For each of these two re-examinations, in accordance with the case-law of the General Court (40), the Commission may take account only of the information that was available to it on the date of adoption of the annulled decision, i.e. 8 July 2008 (41).

(33) On 13 November 2012 a meeting took place between the Commission, the French authorities and representatives of SNCM.

(34) By letters dated 6 December 2012 and 5 February 2013, the French authorities made two separate requests for a decision to re-open the procedure, on the following grounds: by spelling out the criteria for the prudent investor in a market economy test, the General Court had handed down an innovative judgment that necessitated the re-opening of the adversarial procedure. By letters dated 15 January and 13 February 2013, the Commission rejected these requests, emphasising that the procedure could be re-opened at the precise point where the illegality had occurred and pointing out that the 2006 opening decision was not unlawful in any way. However, it also informed the French authorities that they were at liberty to submit any supplementary information for discussion or analysis or any document that they felt appropriate.

(35) The French authorities sent the Commission an information note on 16 May 2013.

(36) By letter dated 19 June 2013, SNCM also requested a decision to re-open the formal investigation procedure on grounds similar to those put forward by the French authorities. The Commission rejected this request by letter dated 10 July 2013. However, the Commission also informed SNCM that it was at liberty to submit any supplementary information for discussion or analysis or any document that it felt appropriate.

(37) On 27 August 2013, SNCM sent an information note and a new report on the sale of SNCM.

II. DESCRIPTION

2.1. THE RECIPIENT OF THE MEASURES COVERED BY THIS DECISION

(38) The recipient of the measures covered by this decision is SNCM, which has several subsidiaries in the maritime sector and operates the maritime transport of passengers, cars and lorries on routes between mainland France and Corsica, Italy (Sardinia) and the Maghreb (Algeria and Tunisia).

(39) SNCM is a limited liability company which came into being in 1969 with the merger of Compagnie Générale Transatlantique and Compagnie de Navigation Mixte, both established in 1850. At that time called Compagnie Générale Transméditerranéenne, it was renamed Société Nationale Maritime Corse-Méditerranée in 1976, after SNCF had acquired a stake in its capital. The company was chosen by the French Government to implement the principle of territorial continuity with Corsica, bringing maritime transport fares into line with SNCF rail transport fares on the basis of an agreement concluded on 31 March 1976 for a term of 25 years. The French Government had already entrusted Compagnie Générale Transatlantique with the operation of services to Corsica through an earlier agreement of 23 December 1948.

(40) At the time of the notification of the recapitalisation in 2002, 20 % of SNCM was held by SNCF and 80 % by CGMF. As a result of the sale of the equity capital in SNCM on 30 May 2006 (see recital 18 of this decision), BCP and VT hold 38 % and 28 % respectively of SNCM’s capital, while CGMF retains 25 % (9 % of the capital is reserved to employees).

(41) In 2008, the main subsidiaries of SNCM were Compagnie Méridionale de Navigation (‘CMN’) (42), Compagnie Générale de Tourisme et d’Hôtellerie (‘CGTH’) (43), Aliso Voyage (44), Sud-Cargos (45), Société Aubagnaise de Restauration et d’Approvisionnement (‘SARA’) (46), Ferrytour (47) and Les Comptoirs du Sud (48).

(42) Following the disposal of the high-speed vessels Aliso in September 2004 and Asco (49) in May 2005, the SNCM fleet comprises 10 vessels (5 car ferries (50), 4 mixed vessels (freight and passenger) (51) and a high-speed vessel operating principally from Nice (52)), 7 of which it holds in its own name (53).

(43) For the sake of completeness, it should be noted that regular shipping services between the ports of mainland France and Corsica have since 1948 been operated as a public service. SNCM and CMN were the concession-holders between 1976 and 2001 under a framework agreement initially concluded for 25 years. In accordance with the Community rules in force (54) and following the European invitation to tender (55) organised by the Corsican regional authorities (56), SNCM and CMN jointly secured the public service delegation to operate services between Marseille and Corsica in exchange for financial compensation from 2002 to 2006.

(44) Since the public service delegation was to expire at the end of 2006, the public shipping service referred to above, which was the object of a new Europe-wide invitation to tender (57), was awarded to the SNCM-CMN joint venture from 1 May 2007 to 31 December 2013 for a subsidy of approximately EUR 100 million per annum.

(45) Similarly, obligations relating to the frequency of services are imposed on all operators providing services to the island from Toulon or Nice. On those routes, Corsican residents and other categories of passengers were entitled from 2002 to 2013 to social aid established pursuant to Commission decisions of 2 July 2002 (58) and 24 April 2007 (59).

2.2. COMPETITIVE ENVIRONMENT

(46) SNCM operates mainly in two separate markets, passenger traffic and freight traffic. It operates services to Corsica and the Maghreb from France and, to a lesser extent, services to Italy and Spain.

2.2.1. Services to Corsica

2.2.1.1. Passenger transport

(47) The operation of passenger transport services to Corsica is a highly seasonal market. It is distinguished by seasonal peaks of passenger numbers which may be up to 10 times those of the slackest periods, which requires operators to provide a fleet which can absorb those peaks. Half of the turnover is generated in July and August. Furthermore, there is an imbalance in respect of the direction of the route, even in peak periods: in July, for example, departures from the mainland are full whereas the return is almost empty. As a result, the average annual passenger load factors of the vessels are relatively low.

(48) SNCM is the incumbent operator linking Corsica to the French mainland. Broadly speaking, two thirds of its activities are carried on between Marseille and Corsica under a public service delegation; the other third of its activities comprises routes with other departure points or destinations (Nice-Corsica, Toulon-Corsica, international routes to Sardinia and the Maghreb).

(49) SNCM has always had a monopoly on its principal activity. Since 1996, however, it has faced competition which has grown very quickly. Today the dominant player in shipping services between the mainland and Corsica is CFF and its market share continues to grow. Although it has been present in that market only since 1996, CFF has seen its passenger traffic increase by 44 % a year between 2000 and 2005, and that growth continues. Thus, in 2008, nearly […] (60) % of passengers by sea between the mainland and Corsica took a CFF ferry, whereas only […] (60) % used an SNCM service, and CMN carried the remaining passengers, i.e. […] (60) %.

(50) The position attained by CFF in the relevant market since 2000 is also reflected in the number of passengers carried per season between Corsica and mainland France. The graph below shows that CFF’s market share went from 45 % in 2000 to 70 % in 2007 and SNCM’s share went from 53 % to 26 % during the same period, with a difference of more than a million passengers transported. Graph Number of passengers transported per season (May-September) between mainland France and Corsica: 2000 to 2007 seasons Source: Observatoire régional des transports de la Corse.

(51) The other minor competitors to SNCM operating services to Corsica are Compagnie Méridionale de Navigation (CMN), Moby Lines, Happy Lines and TRIS.

(52) Since 2006, SNCM’s capacity and its market shares for services to Corsica have decreased, with a reduction of 8 % in available seats (– 20 % for services from Nice and – 3 % for services from Marseille).

(53) However, the continued reduction in market shares demonstrates that the renewal of confidence on the part of passengers, which had been greatly damaged by the strikes and disruptions caused by the industrial disputes of 2004 and 2005, in particular at the time of the privatisation of the undertaking, is very slow.

(54) Passenger transport by sea between the mainland and Corsica has grown on average by 4 % a year since 1993; that growth should continue, with an increase of […] (60) % also forecast for 2008 (relevant at the time for the examination of the facts), then moderate growth over the coming years. None the less, new players do not appear to be seeking to enter that market. At the time of the call for tenders put out by the Office des Transports de Corse to award the public service delegation to operate services by sea to a number of Corsican ports from 2007 to 2013, no candidates other than CFF and SNCF-CMN came forward, even though part tendering on a given route was possible.

(55) CFF, SNCM’s main competitor, greatly increased its passenger capacity from 500 000 to 4,5 million between 1999 and 2007 (including a 30 % increase between 2006 and 2007), which enabled it to increase its traffic (from 1,3 million in 2005 to 1,6 million in 2007) and its market share. For structural reasons, that policy none the less results in a lower passenger load factor for CFF than for SNCM, with a difference in the region of 10 percentage points in 2007. For SNCM, the average passenger load factor in 2007 was 48 %, which is normal having regard to the fact that the market is very seasonal (see above).

2.2.1.2. Transport of freight

(56) As regards freight traffic to Corsica, in 2005 SNCM held around 45 % of the Marseille-Toulon market to Corsica.

(57) SNCM and CMN have a de facto near-monopoly for (unaccompanied) general goods traffic. Under the public service delegation contract, the two firms operate frequent services from Marseille to all Corsican ports.

(58) For accompanied trailers loaded onto ferries, accounting for 24 % overall of general goods traffic measured in linear metres, there is competition among all the passenger transport operators. SNCM and CMN also have the main share of the market in this accompanied traffic. The other operators, in particular CFF, have a 10 % share, i.e. 2 % of the overall market.

(59) For accompanied automotive vehicles (61) loaded onto ferries (approximately 24 % of general goods traffic in 2003), SNCM and CMN also hold the majority of the relevant market. However, since 2002 CFF has been developing its services and holds approximately 15 % of the market.

2.2.2. Services to the Maghreb

(60) Tunisia and Algeria are an important market of approximately 5 million passengers, with air transport predominating. In that context, transport by sea represents about 15 % of traffic. While Algeria represents a significant maritime market of approximately 560 000 passengers, Tunisia is a smaller market in the region of 250 000 passengers.

(61) The French maritime transport market to the Maghreb saw steady growth of around 13 % between 2001 and 2005. Having regard to the prospects for growth in tourism in that region, maritime transport was expected (relevant at the time for the examination of the facts) to see an annual growth rate of around 4 % by 2010.

(62) In Algeria, SNCM is the second-largest operator in the market after Entreprise Nationale de Transport Maritime de Voyageurs (ENTMV), an Algerian public undertaking. SNCM’s market share increased from 24 % in 2001 to 35 % in 2005.

(63) SNCM is the second-largest operator in the market to Tunisia after Compagnie tunisienne de navigation (CTN). Although SNCM has lost market share to CTN since 2001, going from 44 % to 39 % in 2004, an improvement was, however, recorded in 2005 (40 %).

2.3. DESCRIPTION OF THE MEASURES COVERED BY THIS DECISION

2.3.1. The 2002 recapitalisation of SNCM

(64) Following the Commission decision of 17 July 2002 to authorise rescue aid to SNCM (62), on 18 February 2002 the French authorities notified the Commission of planned restructuring aid to SNCM. That measure consisted in the recapitalisation of SNCM, through its parent company CGMF, to the tune of EUR 76 million, of which EUR 46 million was accounted for by restructuring costs (63). The objective of the capital increase was to increase SNCM’s own capital from EUR 30 million to EUR 106 million.

(65) In accordance with the 1999 guidelines, the French authorities submitted to the Commission a restructuring plan (64) for SNCM concerning five points: (i) a reduction in the number of crossings and the redeployment of its vessels between the different routes (a reduction in services to Corsica and an increase in services to the Maghreb). The restructuring plan provided for a reduction in the number of crossings from 4 138 (3 835 for SNCM and 303 for its subsidiary Corsica Marittima) to 3 410 in 2003 with the following route changes: — changes to routes between Marseille and Corsica in accordance with the terms and conditions of the 2001-2006 public service contract, — near-withdrawal of routes between Toulon and Corsica, — reduction of services between Nice and Corsica, — closure of the Livorno-Bastia line with dedicated equipment, actually closed in 2003, — consolidation of services from Algeria and Tunisia by the vessels Méditerranée, Ile de Beauté and Corse and the withdrawal of the Genoa-Tunis service; (ii) a reduction in its fleet by four vessels, which was to provide EUR 21 million of liquid assets; (iii) the transfer of certain property assets; (iv) a reduction in staff (65) of approximately 12 % which, combined with a sensible wage policy, was to make it possible to reduce crew costs from EUR 61,8 million in 2001 to EUR 54,8 million on average from 2003 to 2006 and shore costs from EUR 50,3 million in 2001 to EUR 45,8 million over the same period; (v) the closure of two of its subsidiaries, Compagnie Maritime Toulonnaise and Corsica Marittima, whose residual activities would be taken over by SNCM.

(66) Following the observations made by the Commission in its decision of 19 August 2002, the French authorities, in their letter of 31 January 2003, set out the improvements made to the restructuring plan on the following points: — commitments and clarifications concerning wage policy, — a plan for reducing costs in intermediate purchases, — a commitment that SNCM would not initiate a price war with its competitors operating services to Corsica.

(67) On the last point, the French authorities state that ‘SNCM makes that commitment without reservations, because it takes the view that a price war of its own making would not be consistent either with its strategic positioning, its interest (because it would lead to a reduction in revenue), its usual practices or its expertise’.

(68) In their restructuring plan, the French authorities submitted to the Commission a detailed financial model for 2002 to 2007 on the basis of median hypotheses relating to a series of variables (66). The financial projections show, inter alia, a return to operating profit from 2003. Table 1 Financial model for 2002-2007 EUR million 2000 Actual 2001 Actual 2002 Plan 2002 Actual 2003 Plan 2004 Plan 2005 Plan 2006 Plan 2007 Plan Turnover 204,9 204,1 178 205,8 190,4 192,9 195,2 197,1 193,9 Operating subsidies 85,4 86,7 74,5 77,7 69,9 68,8 68,4 67 68,5 Operating result –14,7 –5,1 1,2 –5,8 6,8 10,6 10,7 8,1 9 Net result –6,2 –40,4 23 4,2 12 14 1 3 3 Capital 67,5 29,7 119 33,8 124 134 145 160 169 Net financial debt (excl. leasing) 135,8 134,5 67,7 144,8 55,2 38,2 57,1 115,7 228,1 Financial ratios Operating result/turnover+subsidies –5 % –2 % 0 % –2 % 3 % 4 % 4 % 3 % 3 % Capital/balance-sheet debt 50 % 22 % 176 % 23 % 225 % 351 % 254 % 138 % 74 % Figures for 2000, 2001 and 2002 taken from SNCM’s annual reports for 2001 and 2002.

(69) According to the French authorities, the EUR 76 million capital contribution and the return to operating profitability, expected from 2003, should make it possible to raise the company’s capital from its level of about EUR 30 million at the end of 2001 to EUR 120 million in the short term (2003) and then to EUR 160-170 million at the end of the period covered by the plan (2006-2007). That was to lead to a reduction in debt from EUR 145 million in 2002 to levels of EUR 40 million to EUR 55 million from 2003 to 2005. In the last years of the plan, an increase in debt was forecast by the company because of the replacement of one or two vessels (full ownership).

(70) The French authorities also provided a sensitivity analysis of expected results in relation to working hypotheses in respect of traffic on different routes. On that basis, the different simulations show that SNCM should have returned to profitability under the scenarios in question.

(71) Initially, the French authorities described two alternative methods which they rejected as being too costly. (i) The first valuation method consisted in adding together the costs of all the restructuring measures. It led to a EUR 90,9 million financing requirement, based on the following: — accumulated losses from 1991 to 2001, i.e. EUR 41,7 million (EUR 29 million — figure validated by Decision 2002/149/EC of 30 October 2001 (OJ L 50 of 21 February 2002, p. 66), EUR 6,1 million in respect of 2000 and EUR 6,6 million, before restructuring costs, in respect of 2001), — the reduction in resources made up of excess tax depreciation between the same dates, i.e. EUR 24 million (the item falls from EUR 86 million to EUR 62 million on the balance sheet over the period, which reflects the extension of the depreciation period from 12 to 20 years, the lesser use of that resource and the use of leasing for the latest units delivered), — capital gain on disposal generated during restructuring, i.e. EUR 21 million, deducted from the financing requirement, and — cumulative effect of restructuring charges of EUR 46,2 million (see footnote 58). (ii) The second method consisted in determining the amount of capital the banks would require for the entire fleet, given that for financing the purchase of a vessel banks in general require capital corresponding to 20 % to 25 % of the vessel’s value. On the basis of a historical acquisition cost of EUR 843 million for the fleet, the French authorities calculated a capital requirement of between EUR 157 million and EUR 196 million. After deducting existing capital at the end of 2001, this method led to a recapitalisation requirement of EUR 101 million to EUR 140 million.

(72) The method finally chosen by the French authorities to determine the amount of the recapitalisation involves calculating the financing requirement on the basis of the average capital/debt ratio of five European shipping companies recorded in 2000. In spite of the differences in the balance sheets of those undertakings, the average calculated by the French authorities was 79 %. The French authorities submit that the financial projections for 2002 to 2007 give an average capital/debt ratio of 77 %, with capital to reach EUR 169 million in 2007. Such a level of own capital was to be obtained by means of a EUR 76 million recapitalisation and the success of the measures provided for in the restructuring plan.

2.3.2. Measures subsequent to the 2002 recapitalisation

2.3.2.1. Preliminary remark

(73) The recapitalisation and the restructuring plan of 2002 did not produce the expected results and, from 2004, the economic and financial situation of SNCM greatly deteriorated. Both internal factors (industrial disputes, insufficient and belated achievement of productivity objectives, loss of market share) and external factors (reduced appeal of Corsica as a destination, acquisition of market share by CFF, management errors by the State (67)), as well as the increased cost of fuel, contributed to this deterioration.

(74) Accordingly, SNCM’s operating results were EUR – 32,6 million in 2004 and EUR – 25,8 million in 2005. The net result was EUR – 29,7 million in 2004 and EUR – 28,8 million in 2005.

(75) The deterioration in SNCM’s economic and financial situation led the French authorities to sell assets over and above what was laid down in the 2002 restructuring plan and required by the 2003 decision and to initiate a procedure to seek private partners. Table 2 List of assets sold by SNCM since 2002 Net proceeds Date Sales proposed in the 2002 notification (EUR thousand) 25 165 the Aliso (instead of the Asco, in accordance with the Commission decision of 8.9.2004) (315) 30.9.2004 the Napoléon 6 396 6.5.2002 the Monte Rotondo 591 31.7.2002 the Liberté 10 088 27.1.2003 All Schuman property 8 405 20.1.2003 Additional sales required by the Commission in its decision of 9.7.2003 (EUR thousand) 5 022 SCI Espace Schuman 765,7 24.6.2003 Southern Trader 2 153 22.7.2003 Someca 1 423,9 30.4.2004 Amadeus 680 12.10.2004 CCM — ( 68 ) — Additional sales occurring after the decision of July 2003 (EUR thousand) 12 600 the Asco 7 100 24.5.2005 Sud-Cargos 4 300 15.9.2005 Sales of flats from SNCM’s housing stock (formerly occupied by SNCM staff) 1 200 9.2003 to 2006 TOTAL (EUR thousand) 42 385

2.3.2.2. Measures subsequent to the 2002 recapitalisation

(76) The process of selecting private partners took place from 26 January 2005 to the end of September 2005.

(77) On 26 January and 17 February 2005, the French Government announced that it was going to begin searching for a private partner to take a stake in SNCM’s capital, with a view to strengthening the latter’s financial structure and supporting it in the changes necessary for its growth.

(78) Agence des Participations de l’État (‘APE’) appointed an independent party to supervise the search process and instructed an advisory bank (HSBC) to contact potential buyers.

(79) In that context, 72 industrial and financial investors were contacted for the purpose of specifying the financial conditions of a proposal to support the company’s industrial plan and preserve jobs and the efficient performance of the public service. Twenty-three of them submitted expressions of interest, 15 confidentiality agreements were signed and 15 information notes were sent. Six undertakings submitted offers in the first round on 5 April 2005 and three offers (Connex — now Veolia Transdev (VT), Caravelle and BCP) were received in the second round on 17 June 2005 as well as an expression of interest for a minority stake (Comanav). Three offers were received in the third round on 28 July 2005.

(80) On 14 September 2005, each undertaking was invited to submit its firm and final proposal before 15 September 2005. On that date, since Connex had withdrawn, the State received two firm proposals of capital contributions and the purchase of the entire capital from the BCP and Caravelle groups.

(81) On 27 September 2005, France published a press release stating that, on the basis of an in-depth examination of the two proposals, the one submitted by the BCP group was chosen because, while being the most acceptable from a financial point of view, it was the best able to defend the interests of the company, the public service and jobs. BCP’s initial offer was for a negative price of EUR 113 million and was the lowest estimate of the negative price.

(82) That initial offer from the potential buyers provided expressly for the possibility of adjusting their initial proposal once audits had been carried out. The French authorities stated that the initial negative price was revised upwards following the audits presented on 16 December 2005 owing to objective elements influencing the regulatory and economic context in which SNCM operates which occurred after the proposal was submitted on 15 September 2005. The negative price was thus revised to EUR 200 million.

(83) The negotiations between the French authorities and the future buyers, i.e. BCP in association with the Connex group, now Veolia Transdev, a subsidiary of Veolia, made it possible to lower that figure to EUR 142,5 million, increased by the payment of a part of the expenditure relating to the mutual societies of SNCM’s retired employees (EUR 15,5 million).

(84) Following this open, transparent and non-discriminatory selection procedure, an agreement was finally reached on 13 October 2005 between the State, BCP and VT in a very difficult company and financial context. VT is SNCM’s industrial operator (28 % stake) whereas BCP is the main shareholder with a stake of 38 %. The State committed itself, in particular towards the employees, to retaining a 25 % (69) stake in the company. BCP and VT drew up a business plan for SNCM which was notified to the European Commission on 7 April 2006.

(a) The content of the memorandum of understanding

(85) The memorandum of understanding, under which 75 % of SNCM’s capital is sold to private buyers, was signed on 16 May 2006 by the parties (BCP, VT and CGMF).

(86) Section II of the memorandum of understanding provides that CGMF undertakes to approve, subscribe to and fully pay up an increase in SNCM’s capital for a total of EUR 142,5 million.

(87) In addition to the increase in capital, CGMF undertakes to make EUR 38,5 million available to SNCM, in the form of a current account advance. That advance, which will be paid by SNCM to a trustee (the bank CIC), is intended to finance the ‘ex gratia’ part of the cost, which is in addition to amounts payable under legislation and agreements in the event of a plan to reduce staff numbers implemented by the buyers. The payment of compensation over and above payments received in accordance with legislation and agreements is done on an individual and named basis corresponding to staff who have left the undertaking and whose employment contract was terminated.

(88) That mechanism is laid down in Article II.2 of the sale agreement of 16 May 2006, which provides that that account is intended ‘to finance the proportion of the cost of possible voluntary departures or termination of employment contracts … which is in addition to sums of all kinds which must be paid by the employer under legislation and agreements.’ The task of the trustee is ‘to release funds as soon as the employees in question who have not been redeployed internally within the SNCM group actually leave the company and to release the balance of the amount on deposit at the end of the trusteeship’. The operation of this account is the subject of a trusteeship agreement annexed to the memorandum of understanding. In order to enable the escrow account to be activated, SNCM must provide the Chairman of CGMF with a list of the names of staff whose employment contract has been terminated and for whom activation of the escrow account is requested together with a monthly statement of the net expenditure, which is the detailed breakdown of all the compensation and expenses paid to the staff in question. At the same time, SNCM informs the trustee of the ‘additional actual monthly cost’ per employee, which is the amount over and above the sums of all kinds which must be paid by the employer under legislation and agreements. The total amount of additional ex gratia measures by the State may not, under any circumstances, exceed EUR 38,5 million and in the event that these additional social measures do not reach this threshold in the 3 years following the sale, the balance will be repaid to the State.

(89) Section III of the memorandum of understanding provides that CGMF, following these transactions, is to sell to the private buyers its shares representing 75 % of the shares comprising the share capital of the undertaking and the escrow account intended to finance the part of the social plan over and above any obligations under agreements or legislation.

(90) Section III of the memorandum of understanding also provides for an additional capital increase of EUR 8,75 million by BCP/VT, made available to SNCM on the basis of its cash requirements. Paragraph III.2.7 of the memorandum of understanding provides that the value of CGMF’s shares is to be equal, at all times, to their original nominal value increased by […] (60) % of their paid-up nominal value, multiplied by D/365, where D is the number of days since the date of sale, subject to deduction of any amounts paid (dividends, for example). These arrangements do not apply in the event of receivership or liquidation of the company by the court.

(91) The memorandum of understanding (Section III.5) includes a cancellation clause granting the right to sell SNCM, which may be exercised concurrently by the buyers should one of the following events occur because these scenarios would call into question the credibility of their business plan and the company’s return to viability: — the failure to award the public service delegation for services by sea to Corsica for the period commencing 1 January 2007 or its award on substantially worse terms, — any negative decision by the European Commission or a judgment by the General Court or by the Court of Justice, such as a rejection of the transaction or the imposition of conditions having a substantial impact on the value of the company, within a deadline of 6 years from the date of acquisition by the partners of rights in respect of the company.

(92) Section VII of the memorandum of understanding provides that CGMF is to pay a part of SNCM’s social security liabilities in terms of the costs of the mutual societies of its retired workers for an amount estimated at EUR 15,5 million from the date of the transfer of ownership of the undertaking.

(93) The detailed rules of governance of the undertaking are set out in Section IV of the memorandum of understanding. There will be a change in the way that SNCM is managed; it will be converted into a limited liability company with a board of directors and a supervisory board. The supervisory board will be made up of 10, then 14 members. It will be chaired provisionally by a representative of the State. If the public service delegation is entrusted to SNCM, the Chairman of the supervisory board will be replaced by a representative of BCP. The board of directors has the task of carrying out the operational management of SNCM.

(94) On 26 May 2006, the French Government confirmed the sale of SNCM as well as the measures referred to above.

(b) The measures

(95) In the light of the foregoing, the memorandum of understanding contains three types of state measures justifying an examination under the Union’s State aid rules: — the sale of 75 % of SNCM at a negative price of EUR 158 million (capital contribution of EUR 142,5 million and payment of the costs of the mutual societies for an amount of EUR 15,5 million), — the current account advance by CGMF for the amount of EUR 38,5 million for staff laid off by SNCM, — the capital increase of EUR 8,75 million to which CGMF subscribed jointly and concurrently with the capital contribution of EUR 26,25 million by VT and BCP, — the sale cancellation clause (70).

2.4. SUBJECT MATTER OF THIS DECISION

(96) This final decision relates to the measures implemented by France in favour of SNCM since 18 February 2002, namely: — the balance of the capital contribution by CGMF to SNCM for the amount of EUR 76 million in 2002, i.e. EUR 15,81 million, — the negative price of EUR 158 million obtained by CGMF on the sale of SNCM, — the current account advance by CGMF for the amount of EUR 38,5 million for staff laid off by SNCM, — the capital increase of EUR 8,75 million subscribed by CGMF;

(97) This decision does not concern the compensation for SNCM’s public service obligations for the period 1991-2001, which was confirmed as being compatible with the internal market by the judgment of the General Court of 11 September 2012 (71).

(98) Nor does this decision concern the examination of the financial compensation paid or to be paid to SNCM for public service obligations for the period 2007-2013, which is the subject of a separate procedure (72).

(99) Furthermore, it should be noted that the judgment of 11 November 2012 has been the subject of two appeals before the Court of Justice, lodged by SNCM and France respectively in Joined Cases C-533/12 P and C-536/12 P. This decision has been taken to comply with the judgment under appeal because the judgment annulled the decision of 8 July 2008. Under these conditions, if the examination of the appeals were to result in the partial or full annulment of the judgment of 11 November 2012 and reinstate certain parts of the decision of 8 July 2008, this decision would become null and void because of the appeal judgments, inasmuch as this decision concerns reinstated measures.

2.5. GROUNDS LEADING TO THE INITIATION OF THE FORMAL INVESTIGATION PROCEDURE IN 2002 AND ITS EXTENSION IN 2006

2.5.1. Initiation of the 2002 formal investigation procedure

(100) The Commission, in its decision to initiate the procedure of 19 August 2002, while acknowledging that SNCM was an undertaking in difficulty, expressed doubts as to the compatibility of the notified measure with the criteria laid down in point 3.2.2 of the 1999 guidelines in force at the time.

(101) The Commission expressed certain doubts regarding the restructuring plan, having regard to the absence of an analysis of the causes of the undertaking’s losses. In particular, the Commission raised questions concerning the links between the losses and the public service obligations, the impact of SNCM’s policy of buying vessels on its income statements and the measures planned to increase the undertaking’s productivity.

(102) Moreover, the Commission noted certain lacunae in the restructuring plan, in particular the absence of specific measures to reduce the amount of intermediate consumption and the absence of a reference to SNCM’s future pricing policy.

(103) The Commission also raised questions regarding the relevance of the calculation method adopted by the French authorities to determine the amount of the recapitalisation and regarding some of the assumptions underlying the financial simulations.

2.5.2. Extension of the 2006 formal investigation procedure

(104) By its decision of 13 September 2006, the Commission decided to extend the 2002 formal investigation procedure to the measures planned in connection with the sale of SNCM to the private sector.

(105) In the event that this amount were categorised as State aid compatible with Article 86(2) of the EC Treaty, the Commission took the view that it had to be assessed in the light of the Community Guidelines on State aid for rescuing and restructuring firms in difficulty (hereinafter: ‘the 2004 guidelines’) (73). In so far as the amount of restructuring aid is noticeably lower than that notified in 2002 and approved in 2003, the Commission expressed doubts as to whether it was appropriate to maintain all of the compensatory measures imposed on SNCM by the 2003 decision.

(106) The Commission also expressed doubts about whether the conditions imposed by the 2003 decision had been complied with, namely the principle of price leadership and the frequency of services to Corsica.

(107) As regards the negative price at which SNCM was sold, the Commission had doubts about whether the recapitalisation by the State prior to the sale of SNCM complied with the principle of the private investor in a market economy. In particular, the Commission expressed doubts as to the validity of the calculation of the liquidation costs which the State as shareholder would be required to pay in the event of SNCM being liquidated.

(108) The Commission questioned whether the financial measures could be justified under the 2004 guidelines.

(109) It also cast doubts on the second recapitalisation of EUR 8,75 million in relation to observance of the principles of concomitance of the private and public investment and the similarity of the subscription conditions within the meaning of the case-law.

(110) Finally, the Commission expressed doubts as to whether the additional social measures of EUR 38,5 million in aid to individuals could constitute an indirect advantage for the undertaking. It also highlighted the risk of conflict with the supplementary redundancy payments as part of the risks borne by a prudent investor.

III. OBSERVATIONS BY THE FRENCH AUTHORITIES ON THE OPENING DECISION

3.1. ON THE 2002 RECAPITALISATION

(111) The restructuring plan notified in 2002 consisted of a capital contribution of EUR 76 million, of which EUR 53,48 million was public service compensation. Allowing for the sale of shares carried out by SNCM (74), the amount of aid actually paid becomes EUR 69 292 400. The French authorities take the view that, if the amount of EUR 53,48 million is compatible aid, then the amount of aid to be regarded as restructuring aid under the notification in 2002 is EUR 15,81 million.

3.2. ON THE MEASURES SUBSEQUENT TO THE 2002 RECAPITALISATION

(112) France recalls, first, that the seriousness of the industrial action of 2004 to 2005 and the deterioration in the economic and financial situation of SNCM led the State as shareholder to launch a procedure for selecting private investors in January 2005 and to implement urgent measures (in particular the sale of the Asco and the shareholding in Sud Cargos (75)).

3.2.1. On the negative sale price of SNCM

(113) Under the relevant Community case-law at the time, the French authorities call upon the Commission to take the view that the negative sale price of SNCM of EUR 158 million does not contain any measure which may be classified as aid within the meaning of Article 87(1) of the EC Treaty because the French State acted like a private investor in a market economy.

(114) First of all, France observes that the final price of EUR 158 million, which is lower than the negative price that the buyers initially asked for after their audit of SNCM, is the result of a negotiation of transfer of control conducted under an open, transparent and non-discriminatory competitive tendering procedure and, for that reason, does in fact constitute a market price.

(115) France takes the view that, because the search for a private partner for SNCM was conducted under an open, transparent and non-discriminatory competitive tendering procedure at the end of which the best bid was chosen, the sale price is a market price.

(116) According to the French authorities, the sale at the negative price of EUR 158 million took place under the most favourable conditions for the State in accordance with Community case-law at the time and the Commission’s decision-making practice and therefore contains no aid element. France takes the view that that negative price is lower than the liquidation cost which the State would have had to bear in the event of the liquidation of the undertaking.

(117) That is, in France’s view, the only conclusion which can be reached irrespective of whether the approach followed is that stemming from the case-law of the Court of Justice of the European Communities (hereinafter: ‘the Gröditzer case-law’ (76)) or that based on the analysis of the actual costs of liquidating SNCM (the ABX decision (77)).

(118) As regards the first method, based on the Gröditzer case-law, France argues that that judgment confirmed the Commission’s assessment in its decision of 8 July 1999, to the effect that ‘the cost of liquidation comprises only the liquidation value of the assets’ (78).

(119) In that respect, the reports by CGMF (79) and Oddo-Hastings (80) estimate the liquidation value of the assets at a minimum of EUR 190,3 million on 30 September 2005 (81).

(120) Accordingly, given that the State as the owner and shareholder of a company is liable for its debts only up to the liquidation value of its assets (Hytasa case-law (82)), France asserts that the liquidation value of the company’s assets estimated to be at least EUR 190,3 million is considerably higher than the negative sale price of EUR 158 million.

(121) On the second method, France points out that it follows from the Commission decision on the State aid implemented by Belgium for ABX Logistics, in which the Commission examined a negative sale price having, as in this case, the character of a market price by comparing it to the costs which the State as shareholder would actually bear in the event of a voluntary liquidation or compulsory liquidation as assessed by an independent third party. According to France, the Commission recognises in particular in that decision the validity of a certain number of costs which can result from an action by creditors to make good a shortfall in assets (action en comblement de passif) or from the liquidation for other divisions of the group liquidating its subsidiary.

(122) On the basis of the CGMF and Oddo-Hastings reports cited above, the French authorities submit that the actual costs which the French Republic would have to bear as shareholder amount to between EUR 312,1 million and EUR 361 million on 30 September 2005, broken down as follows: — EUR [70-80] (60) million under the social plan under collective agreement, which covers all the costs associated with the termination of the employment contract and for which the undertaking is contractually liable, — EUR [30-40] (60) million under the social plan not under collective agreement, which covers all the costs associated with the flanking measures to SNCM’s statutory and regulatory redundancy obligations and the indirect costs of the social plan under collective agreement, — Between EUR [200-210] (60) million and EUR [250-260] (60) million as payment of supplementary redundancy payments for which the State would be held liable by the court, in addition to the compensation paid under the social plan under collective agreement and the social plan not under collective agreement, following the Aspocomp Group Oyj judgment of 22 March 2005 of the Rouen Court of Appeal.

(123) That method takes account, in particular, of the risk that the French State would be required to make good a shortfall in assets if the court were to consider it to be the de facto manager of SNCM. The French authorities believe that the risk of an action to make good a shortfall in assets cannot be discounted, particularly in the light of a precedent set by the French Court of Cassation (83). Accordingly, in several letters to the Commission, the French authorities submitted that a situation in which a national court orders the State to make good a shortfall in the assets of the undertaking which it manages is a scenario which is more than plausible and that it had to be taken into account in calculating the actual cost of a possible liquidation of SNCM.

(124) On 30 September 2005, the residual value of SNCM’s assets (EUR 190,3 million) was, after payment of preferential debts, EUR 36,5 million. Other cost elements taken into account under the action to make good a shortfall in assets against the State include, inter alia, the costs of termination of the principal operating contracts, the costs related to the cancellation of the lease purchasing conditions of vessels and the payment of unsecured debts, which would result in a shortfall in assets of EUR 134,4 million. The French authorities consider that the State would have been ordered to pay between 85 % and 100 % of that amount.

(125) Furthermore, the French authorities take the view that, because of SNCM’s dependence on the State, and in the light of another French case (84), the liquidation of the undertaking might have led the court to order the payment of damages to employees. According to that case-law, the French authorities believe that it would be very likely that a court would set the amount of additional compensation on the basis of the compensation which would be paid under a social plan submitted prior to the liquidation.

(126) Under that approach, the analysis of actual costs which the State as shareholder would have had to pay shows that the cost to the State of the sale of SNCM at a negative price of EUR 158 million is lower than the actual cost which it would have had to bear in the event of the compulsory liquidation of the undertaking.

(127) In conclusion, the French authorities consider that this amount cannot be classified as State aid.

3.2.2. On the joint capital contribution by the shareholders

(128) France takes the view that, through that shareholding, it acted like a prudent investor because, first, it intervened concurrently as a minority shareholder alongside BCP and VT and, second, that shareholding enjoys a fixed capital return of […] (60) % per year, which protects the State from the risks associated with the implementation of the business plan. France argues that that rate of return is very satisfactory for a private investor (85). It points out, however, that no payment would be due in the event that SNCM is put into receivership or compulsory liquidation or that the buyers exercise the cancellation clause.

3.2.3. On the additional social measures (aid to individuals)

(129) France takes the view, relying on the Commission’s practice in previous decisions, in particular the SFP (Société française de production) case (86), that this financing constitutes aid to individuals which does not benefit the undertaking. Accordingly, the implementation from public funds of additional social measures for persons laid off, without those measures relieving the employer from its usual responsibilities, falls within the scope of the social policy of the Member States and is not State aid.

3.2.4. On the lifting of the restrictions imposed by the annulled decision of 2003

(130) The French authorities point out, on the one hand, that the conditions imposed by the 2003 decision were all implemented and complied with in the period from 2003 to 2006. On the other hand, the French authorities consider that those measures are no longer necessary to prevent a distortion of competition and that maintaining them would be contrary to the principle of proportionality, having regard to the limit on the amount of restructuring aid, henceforth reduced to EUR 15,81 million. In particular, the French authorities take the view that it is necessary to lift the conditions which might still apply, namely those relating to the prohibition on modernising SNCM’s fleet, the observance of the principle of price leadership in tariff matters and the maintenance of frequency of services.

3.3. CONCLUSION

(131) If the Commission were, however, to classify all or part of the new measures as State aid, France would draw the Commission’s attention to the fact that the new measures, by ensuring that SNCM becomes viable again, allow competition to be maintained in the relevant markets, in particular the market for services to Corsica. According to France, that aspect is one of the principles of the guidelines in the rescue of an undertaking in difficulty as noted, in the present case, by the Commission (recital 283 of its annulled decision) and by the General Court in its judgment of 15 June 2005 in Case T-349/03 (paragraph 117). In particular, the latter pointed out that the Commission could consider, in the exercise of its wide discretion, that the presence of an undertaking was necessary in order to prevent the emergence of a strengthened oligopolistic structure in the relevant markets.

(132) As regards the determination of any compensatory measures to be imposed on SNCM, France suggests that the Commission take into account the structure of the market. Accordingly, a reduction in SNCM’s capacity would be such as to strengthen the position of CFF in the market for services to Corsica, which would be dominant from then on (87).

(133) According to the French authorities, the restructuring plan, as updated, complies with the compatibility criteria set out by the Commission in its 1999 and 2004 guidelines. The French authorities maintain that all of the measures laid down in the context of SNCM’s privatisation should also serve to restore SNCM’s long-term viability from the end of 2009 and are restricted to the minimum necessary for that return to viability.

IV. COMMENTS BY INTERESTED PARTIES

4.1. ON THE DECISION TO INITIATE THE 2002 FORMAL INVESTIGATION PROCEDURE

4.1.1. Comments by Corsica Ferries (CFF)

(134) Disputing, first, that SNCM is an undertaking in difficulty within the meaning of the guidelines (88), CFF raises the question whether SNCM can become profitable on the non-subsidised routes. Moreover, CFF notes that, contrary to what is stated in the restructuring plan (89), services are still operated to Livorno.

(135) On the subject of cost reduction, CFF regrets that it does not have access to particular parts of the restructuring plan at which its representatives have levelled criticism (90).

(136) CFF is of the view that the calculation by the French authorities resulting in the amount of EUR 76 million is purely notional (91) while the own capital-to-debt ratio of 79 % decided upon by the French authorities seems exaggerated (92). With regard to SNCM’s shareholdings, CFF notes that some of the subsidiaries are of no relevance to the shipping company’s activities (93).

(137) CFF concludes that the planned aid circumvents the Cabotage Regulation and renders the invitation to tender for Marseille to Corsica services meaningless. CFF emphasises that the planned aid should not result in facilitating a more aggressive commercial offer on the part of SNCM. It suggests that restructuring aid should not be granted until 2007 and only if SNCM loses the next tender in 2006, which would be the only scenario that would genuinely put the public shipping company in difficulty.

4.1.2. Comments by STIM

(138) STIM, the main shareholder in CMN, argues that SNCM’s shares in CMN should be analysed as purely financial assets. According to STIM, CMN and SNCM are independent and in competition with each other on routes other than those from Marseille, even though both are co-contractors under the public service delegation contract.

(139) The letter states that STIM would undertake ‘to buy back all or part, and preferably all, of SNCM’s shares in CMN’, whose value it estimates at between EUR 15 million and EUR 17 million, if the Commission were to take the view, under the conditions it might impose in its final decision, that ‘such a sale is necessary to ensure that the restructuring plan is properly balanced’.

4.1.3. Comments by the representatives of the regional and local authorities

(140) The mayor of the city of Marseille, the president of the general council of Bouches-du-Rhône and the president of the regional council of Provence-Alpes-Côte d’Azur highlighted the economic importance of SNCM’s role in the regional economy.

(141) The president of the regional council of Provence-Alpes-Côte d’Azur added that the conditions for SNCM’s restructuring plan to guarantee the undertaking’s viability appear to be satisfied.

(142) The president of the executive council of the Assembly of Corsica submitted the deliberations of that assembly of 18 December 2002 during which it issued ‘a favourable opinion’ regarding SNCM’s planned recapitalisation.

4.1.4. Comments by the Corsica Transport Office

(143) The Corsica Transport Office notes that the disappearance of SNCM ‘would immediately lead to a major reduction in services’ as it is currently the only company capable of meeting the requirements of the contract with regard to passenger transport. It notes, in addition, the importance of SNCM to the Corsican economy.

4.2. ON THE 2006 DECISION TO EXTEND THE PROCEDURE

4.2.1. Comments by Corsica Ferries France (CFF)

(144) CFF notes the scale of the amounts in question, their disproportionate nature in relation to SNCM’s turnover and the fact that they were paid to SNCM before the Commission took a position on aid classification pursuant to Article 87(1) of the EC Treaty.

(145) CFF draws the Commission’s attention to the fact that the French State’s support for SNCM is of strategic importance to the development of CFF. These unauthorised measures enable SNCM to have a very aggressive tariff policy on the routes on which CFF has been present for 10 years and on which, for the first time since it was set up, it is losing market share.

(146) In respect of the process of competitive tendering for the sale of the company, CFF takes the view that it was not fully transparent in so far as the undertaking selected, namely BCP, no longer has operational control of SNCM, having handed over to the VT group. Furthermore, since the financial conditions had changed to become much more favourable to the buyers, CFF raises the question of the principle of the equal treatment of investors which ought to have prevailed throughout the transaction.

(147) As regards the negative sale price of EUR 158 million, CFF is uncertain whether the criterion of the prudent investor in a market economy applies to the present case. First, CFF wonders whether the view can be taken that the transaction at issue was carried out by the State at the same time as a significant and concurrent action by private operators involved in comparable circumstances, while the State recapitalised the company before the joint recapitalisation by the shareholders and the new restructuring plan. Second, CFF considers that, in the face of SNCM’s serious financial circumstances, a prudent investor would have acted sooner in order to prevent his investment depreciating (94).

(148) CFF takes the view that the reference to the ABX Logistics case is irrelevant. Besides the fact that the circumstances of that case cannot be applied to the present case, CFF notes a significant contribution by the aid beneficiary in that case, which clearly did not happen with SNCM. Furthermore, according to CFF, the Commission decision of 2006 did not take account of the costs relating to the risk of legal proceedings in a liquidation of the undertaking concerned. In that respect, CFF submits that the national case-law relied on by France to justify the costs relating to SNCM’s liquidation does not apply to the present case. According to CFF, the Court of Cassation in the Mines et produits chimiques de Salsignes case does not refer at all to the direct liability of the State as shareholder in the event of the liquidation of an undertaking in which it is the shareholder, but rather the possibility of bringing an action for payment of payroll and social security debts against an industrial and commercial public company and the impossibility for the managers to escape their obligations by relying on action by the public authorities.

(149) As regards the inapplicability to the present case of the Aspocomp case-law established by the Rouen Court of Appeal, CFF submits that the subject-matter of that case, relating to an order that a parent company pay to the employees of a subsidiary social benefits for ‘failure to comply with an agreement’ ratified by the former, is very different from the facts of the SNCM case. There is therefore no definite risk that CGMF or the State will be ordered to make redundancy payments in the event of compulsory liquidation. Moreover, CFF doubts the estimated figure for the other social costs because they seem to differ, depending on the experts asked to determine them.

(150) CFF takes the view that the application of the Community case-law in Gröditzer and Hytasa to the present case necessarily leads to the conclusion that the State did not act like a private investor in so far as, in accordance with the above case-law, the capital contribution by the State was linked to the sale of 75 % of its stake in SNCM, reducing in proportion the prospects of profit in return.

(151) Finally, CFF considers that the comparison between the liquidation costs and the recapitalisation costs should take into account the value of the assets, which is transferred to the buyer in both cases. CFF submits that the value of the assets sold to the buyers varies between EUR 640 million and EUR 755 million (95), compared with the market value of the fleet used by SNCM, which CFF valued at between EUR 644 million and EUR 664 million in August 2006.

(152) As regards the classification of the measures subsequent to the 2002 recapitalisation as restructuring aid, CFF is of the opinion that, although SNCM fulfils the conditions of an undertaking in difficulty under the 2004 guidelines in the period preceding the first recapitalisation of EUR 142,5 million, that classification becomes very questionable for the period preceding the second capital increase of EUR 8,75 million because the undertaking’s capital had been reconstituted.

(153) As regards the viability of the undertaking, CFF emphasises that the sale of SNCM is only partial and is not irrevocable, in the light of the cancellation clauses negotiated with the buyers. Those factors are important elements of uncertainty as regards the will and the ability of the buyers to turn SNCM around and therefore secure the prospects of the undertaking’s long-term viability. Furthermore, CFF states that, contrary to the requirements of the 2004 guidelines, the French authorities did not contemplate discontinuation of the activities which remained structurally loss-making even after the restructuring (96). In addition, CFF expresses its scepticism regarding the plan for reducing costs, despite SNCM’s fleet becoming larger (97) and the planned reduction in staff, in particular in the light of the failure of the 2002 social plan.

(154) CFF doubts whether the new aid is limited to the minimum on account, first, of a lack of clarity as to what the social costs cover and, second, the content of the minutes of SNCM’s meeting of 28 April 2006, according to which a part of that aid would be used to cover the operating losses of the company in 2006 and 2007. CFF also considers that the buyers of SNCM do not contribute substantially to the restructuring of the undertaking.

(155) In order to prevent undue distortions of competition, CFF considers it necessary to renew and specify the compensatory measures imposed on SNCM in 2003 and to add new measures relating to the reduction of SNCM’s presence in the market (98). CFF considers, moreover, that a part of the measures imposed on SNCM by the 2003 decision were not complied with. SNCM acquired new vessels in breach of Article 2 of the Commission’s 2003 decision. In addition, SNCM did not sell its shareholding in CCM, in breach of Article 3 of the Commission decision. Finally, SNCM has had an aggressive tariff policy since 2003, with prices lower than those applied by CFF in breach of Article 4 of the decision (tickets up to 30 % cheaper for identical or comparable services).

(156) Regarding the nature of the second recapitalisation of EUR 8,75 million, CFF takes the view that, in addition to the concurrence of public and private investment, the private action must be significant and carried out under comparable conditions in order that the State action is validated. In the present case, those two conditions are not satisfied. First, the buyers’ shareholding, which is closely linked to the first capital increase of EUR 142,5 million, is not significant. Second, the buyers’ action was not carried out under conditions comparable with those of the state action, in particular by virtue of the cancellation clauses and the expected profitability of CGMF’s minority shareholding.

(157) As regards the social measures of EUR 38,5 million, CFF disputes the classification of that amount as aid to individuals. Although it true that this amount directly benefits SNCM’s employees, CFF submits that the measure could give rise to indirect positive effects for SNCM, in particular in terms of the calming of industrial relations.

4.2.2. Comments by STIM

4.2.2.1. On the measures subsequent to the 2002 recapitalisation

(158) As regards the negative sale price of EUR 158 million, STIM takes the view that this price is not a market price resulting from an open and non-discriminatory competitive tendering procedure because the recapitalisation took place under different conditions from those which must normally guide a private investor. STIM considers that the revalued net book assets would allow, in the worst-case scenario, a liquidation without costs for the State, or even yield a gain on liquidation, that the sale price is derisory compared with the value of the undertaking (estimated at EUR 350 million by STIM) and that the aid is disproportionate to the undertaking’s needs.

(159) STIM also draws the Commission’s attention to the exorbitant nature of the cancellation clause in respect of the sale to the private sector.

(160) Finally, STIM disputes the justification for the negative sale price based on the assumption that liquidation would take place under socially difficult circumstances, which seems unrealistic.

(161) As regards the second recapitalisation of EUR 8,75 million, STIM considers that that capital contribution does not comply with the principle of the private investor in a market economy, having regard to the inadequacy of the guarantees on return on investment. STIM challenges the argument based on the concomitance of private and public investment in order to deny that the contribution is State aid. Such concomitance, if established, is only a pointer and cannot be, by itself, a classification criterion (99). STIM states, finally, that that contribution is a guarantee given to the buyers by the French Government that SNCM has indeed been awarded the public service delegation to operate services to Corsica.

(162) As regards the EUR 38,5 million of aid to individuals, STIM takes the view that this amount is in fact intended to provide SNCM with the resources to comply with certain essential aspects of the recovery plan submitted to the Commission which have not been implemented, in particular the reduction in staff.

4.2.2.2. On compatibility with the 2004 guidelines

(163) STIM takes the view that the aid received by SNCM is not limited to the minimum. The contribution by SNCM and the buyers to the restructuring plan is insufficient, given the conditions imposed in the 2004 guidelines, and it is not demonstrated that SNCM’s situation was so exceptional that it justified a lower own contribution. Furthermore, STIM notes the disproportionate nature of the aid granted in 2006 in so far as it enabled SNCM to set up reserves to cover future losses. Finally, the fact that SNCM did not plan to dispose of the assets which were not essential to the survival of the undertaking is contrary to the requirements laid down by the 2004 guidelines.

(164) STIM considers that the amounts were paid in breach of the ‘one time, last time’ principle established by the 2004 guidelines. The deterioration in the undertaking’s financial situation and the industrial disputes cannot be analysed as exceptional and unforeseeable circumstances for which the recipient company is not responsible.

(165) Consequently, STIM demands additional compensation of half of the aid provided, i.e. EUR 98,25 million, through the sale of an additional vessel and of SNCM’s direct and indirect shareholdings in CMN. In that respect, STIM states that those shareholdings are not strategic within the meaning of the 2004 guidelines on restructuring aid as they are not ‘essential to the firm’s survival’, nor are they inalienable assets.

(166) STIM also submits that the claimed synergies between SNCM and CMN do not exist because SNCM has no real role in the management and development of CMN. STIM stresses, finally, that the shareholders’ agreement linking the two undertakings has not existed since 15 March 2006, when CMN gave notice that it was no longer bound by it, as held by the Paris Court of Appeal.

4.2.3. Comments by SNCM

(167) SNCM sent the Commission a file summarising its economic and competitive position, together with legal advice assessing the risk that, in the event of liquidation proceedings, the state intervention would be characterised by the courts as de facto management of the company for the period preceding privatisation.

(168) The law firm Baker & McKenzie, consulted by SNCM, came to the conclusion that, on the basis of the company’s statutes, supplemented by correspondence, speeches and minutes of the boards, the State […] (60) decisions (100) […](*) bodies (101), […](*) company boards (102). The report also notes that […] (60) SNCM (103). Finally, the same report refers to the fact that […](*) SNCM.

(169) On that basis, SNCM’s expert concludes that it is very likely that the Marseille Commercial Court would have characterised the French State as de facto manager.

(170) Moreover, according to the findings in, inter alia, the reports by the Court of Auditors, the mismanagement attributable to the French State, the de facto manager of SNCM, contributed to SNCM’s established shortfall in assets. The report severely criticises, inter alia, the following acts of mismanagement: the choice […] (60) commercial. The loss caused by mismanagement amounted to […] (60).

(171) In that context, according to SNCM’s expert, there is no doubt that, under an action to make good a shortfall in assets, the State would be ordered to bear all or part of the shortfall, given the very heavy involvement of the State in the management of SNCM, its manifest acts of mismanagement and the scale of its financial resources.

(172) On the basis of the relevant case-law, SNCM’s expert concludes that, if SNCM had been liquidated, the State would certainly have been ordered to pay all of SNCM’s payroll and social security debts. That would have resulted in the State as shareholder being made liable for an estimated share of between 85 % and 100 % of the established shortfall in assets (i.e. between EUR 316,6 million and EUR 385,7 million). Consequently, by deciding to privatise SNCM while strengthening in advance its capital in the amount of EUR 158 million, the State acted like a prudent investor.

V. OBSERVATIONS BY FRANCE ON THE COMMENTS BY THE INTERESTED PARTIES

5.1. OBSERVATIONS BY FRANCE ON THE COMMENTS BY THE INTERESTED PARTIES CONCERNING THE DECISION TO INITIATE THE 2002 FORMAL INVESTIGATION PROCEDURE

5.1.1. On the comments by CFF

(173) The French authorities have indicated that some of the data submitted by CFF concerning SNCM’s services were inaccurate.

(174) Contrary to what is maintained by CFF, the State is of the opinion that the restructuring plan was devised in such a way as to turn SNCM around as soon as possible and to create the right conditions to ensure its viability in the medium and long term. The French authorities note that a significant part of the cost reduction programme has already been implemented. The number of vessels has been reduced and the programme for the disposal of assets is going ahead in accordance with the industrial plan. Services have been reorganised and the action plan to reduce intermediate consumption is beginning to bear fruit. Finally, the employment component of the industrial plan is gradually being implemented. Furthermore, in 2001 SNCM earmarked EUR 21,3 million to finance restructuring measures, in particular the plan to safeguard jobs.

(175) With regard to determining the amount of aid, the French authorities confirm that an own capital/debt ratio of 0,79 is quite typical for the balance sheets of most shipping companies, except in special situations. According to the French authorities, the 0,497 ratio announced by CFF for CMN in 2001 is incorrect because it fails to take account of liquid assets on the balance sheet. With the appropriate correction, CMN’s ratio is 0,557. According to the French authorities, that level is in any event still insufficient for CMN, as illustrated by the cash-flow problems it encountered in 2002. In fact CMN had to borrow up to EUR 8 million from STIM to finance a cash deficit not covered by its banks.

5.1.2. On the comments by STIM

(176) The French authorities maintain that SNCM’s stake in CMN’s capital cannot be construed as a purely financial asset, as STIM appears to allege. France’s position is that SNCM’s shareholdings in CMN are highly strategic in nature. In its opinion, the sale of those shareholdings would not only make no sense commercially but would also be a major strategic error.

5.1.3. On the comments by the representatives of the regional and local authorities

(177) Although France agrees with the overall content of the letter from the president of the Provence-Alpes-Côte d’Azur region, it would none the less note that, contrary to what is asserted in point 2 of that letter (104), supply on the route between mainland France and Corsica is not ‘in excess of demand’ and SNCM’s fare policy complies with the commitments which it made not to start a price war and not to be a price leader.

5.2. ON THE COMMENTS BY THE INTERESTED PARTIES CONCERNING THE 2006 DECISION

(178) In general, France notes that many of the observations by STIM and CFF are identical to the comments submitted by those companies to the Commission in 2003. In particular, they note that CFF’s comments were submitted to the General Court in the action for annulment of the Commission decision of 9 July 2003 and were, for the most part, rejected both by the Commission and the General Court.

5.2.1. On the early implementation of the measures laid down in the first restructuring plan and its amendments

(179) In response to the general remark concerning the early implementation by France of measures which may be classified as aid, the French authorities state that the implementation is justified by the specific features of the procedure, i.e. the annulment in 2005 of the Commission decision of 9 July 2003 authorising the aid, and not by an intention on the part of the French authorities to disregard their obligations under the EC Treaty. Indeed, France states that it has always kept the Commission informed of developments in the matter and of the different measures adopted since January 2005, in accordance with the principle of sincere cooperation between the Member States and the Commission.

(180) Concerning those recent measures, the French authorities consider that, since none of them constitutes aid, Article 88(3) EC is not, ultimately, applicable to them and, accordingly, there is no obligation to suspend their implementation.

5.2.2. On the measures subsequent to the 2002 recapitalisation

(181) As regards the sale process, France states that from the outset it provided for standard selection criteria based primarily on the price offered for the value of SNCM’s shares and, secondarily, on other criteria (industrial plan, company plan and so on), including the amount which the candidates were prepared to invest in the company by way of a recapitalisation. France strongly contests the argument put forward by third parties that the process of offering for sale was not transparent and notes that, in the present case, the State went beyond its statutory and regulatory obligations, substantial and restrictive as they were, provided for in the event of the sale of public shareholdings. France notes that the development following BCP’s offer to buy 100 % of SNCM’s shares occurred in a very difficult financial and company context and that VT’s joining BCP’s offer did not change the commercial and financial terms of the transaction (except for capital ownership).

(182) As regards the negative price of EUR 158 million, the French authorities note that, having regard to SNCM’s financial situation on 30 September 2005, the undertaking was sold at market price and that sale was economically more advantageous than liquidation of the undertaking. In that respect, the French authorities state that application of the private investor criterion in the event of sale of an undertaking close to liquidation must be regarded not as a search for ‘profitability of public action’ but as the prevention of higher losses which the shareholder would have to suffer through a more costly liquidation.

(183) In respect of the price paid, France contests the argument that SNCM was sold at a price which did not reflect its actual value. In particular, it refutes STIM’s estimated value of the undertaking of nearly EUR 350 million, which takes into account only the balance-sheet items which increase the value using book equity (excess tax depreciation, residual gains on vessels, etc.) without taking account of liabilities which reduce it. That method of calculation of a purely accounting nature does not reflect the economic reality of a shipping company, such as SNCM, with assets of value on the balance sheet but also limited profitability and considerable off-balance-sheet liabilities.

(184) The French authorities also refute CFF’s argument that they underestimated the market value of SNCM’s fleet, which CFF assessed at between EUR 406,5 million and EUR 426,5 million. The French authorities argue that the vessels taken into account in CFF’s calculation do not correspond to those held in SNCM’s name on 30 September 2005. The absence of discounts applied to the market value of the vessels does not take account of the background against which a potential compulsory liquidation of those assets would have taken place and, finally, the date chosen to calculate that market value, August 2006, is not the date of the potential liquidation of SNCM to which reference must be made, that date being 30 September 2005. Moreover, France notes that, if the calculation proposed by CFF were to be accepted, the negative price would be three times lower than the liquidation value of the assets required by the Gröditzer case-law, which would therefore be more favourable than the scenarios presented to the Commission by the French authorities.

(185) In response to CFF’s argument calling into question the application of the Gröditzer case-law by referring to the fact that the State’s capital contribution to SNCM was linked to the sale of 75 % of its shareholding, reducing in proportion the prospects of profit in return, the French authorities note that the negative sale price of EUR 158 million does correspond to the sale of the entirety of SNCM’s capital, followed by a new investment by the State of 25 %, giving a return of […] (60) % per year. Accordingly, France takes the view that the return on investment remains guaranteed by virtue of its 25 % shareholding in the company because that stake enjoys a guarantee of a very high return.

(186) France also contests the argument put forward by CFF on the non-applicability to the present case of the ABX approach, taking as a basis in particular the analysis of the actual liquidation costs of SNCM and the risk that the State could be held liable for the liabilities of the undertaking in an action to make good a shortfall in assets as provided for by French insolvency procedures and confirmed by national case-law (judgment of 22 March 2005 by the Rouen Court of Appeal). Although the French authorities consider that their conduct as manager of SNCM could not be described as ‘mismanagement’ in such an action, they insist that there is a very high risk that a national court would make an order against the State for the shortfall in SNCM’s assets owing to flexible criteria for the existence of mismanagement within the meaning of Article L-651-2 of the Commercial Code and pursuant to the case-law cited above, which can be applied to the present case.

(187) In respect of the recapitalisation of EUR 8,75 million, France notes that, contrary to the contentions of CFF and STIM, the capital contribution does not constitute State aid on account of the concurrence of that investment, the similarity of its subscription conditions and the higher-than-average return obtained by the State via CGMF.

(188) In particular, the French authorities submit that the principle of equal treatment of investors is not called into question by the existence of the cancellation clauses since the latter were laid down in connection with the 100 % sale of SNCM and not with the EUR 35 million recapitalisation which followed it.

(189) Furthermore, France submits that its investment is much lower than that of the buyers, since it is only the amount of EUR 8,75 million which must be compared with the investment made by the buyers (EUR 26,25 million). The first recapitalisation of EUR 142,5 million should be examined only as part of the comparison with the liquidation price.

(190) Finally, France contests STIM’s argument that that contribution is a guarantee given to the private buyers that SNCM has indeed been awarded the public service delegation to operate services to Corsica. The French authorities submit that the capital increase is prudent and independent of the undertaking’s performance and that the award of the public service delegation to SNCM does not serve to improve the return expected on that investment.

(191) As regards the EUR 38,5 million of social measures, France repeats the argument that those measures are aid to individuals and that their payment by the State cannot be regarded as providing an indirect advantage to the undertaking since they are in addition to SNCM’s statutory and contractual obligations. Moreover, France points out that those measures do not permit the departure of staff who, without the measures, would remain the responsibility of SNCM.

(192) Contrary to CFF’s argument, the French authorities point out that the EUR 38,5 million does not correspond to the implementation of the staff reductions provided for in the 2003 social plan because those reductions have, despite the delay, already been implemented. The new social plan is therefore in addition to the first social measures of 2003.

5.2.3. On compatibility with the guidelines

(193) France considers that, in the light of the foregoing, the amount of aid to be assessed is EUR 15,81 million.

(194) Contrary to the contentions of CFF, the French authorities consider that, having regard to point 11 of the 2004 guidelines, the first recapitalisation, while enabling SNCM to reconstitute its capital, did not remove its status as an undertaking in difficulty in so far as that recapitalisation was intended to ensure the continuation of the company’s activities.

(195) France refutes CFF’s contentions that it should not have had to re-inject money into the undertaking, given that SNCM could have had recourse to bank credit. In that regard, the French authorities note that, on 24 August 2005, the banks had refused to grant new cash lines to SNCM and that the only conceivable alternatives were therefore privatisation or liquidation of the undertaking.

(196) France contests the arguments put forward by CFF and STIM concerning the failure of the 2002 restructuring plan which, despite some delay, was implemented and made it possible to achieve the objectives in 2005. The deterioration in SNCM’s economic and financial situation owing to factors external to the undertaking itself then made it necessary to extend the plan notified in 2002 and to introduce new measures.

(197) France takes the view that SNCM has good prospects for recovery and that the measures contemplated by the new shareholders, in particular the implementation of the social plan, the reinstatement of routes and the renewal of certain vessels, will enable the undertaking to return to viability. In that regard, France observes that, on account of the revenues deriving from the public service delegation (approximately [50-70] (60) % of SNCM’s turnover) and in view of the level of fixed costs and the difficulties in redeploying the 6 vessels used on the Marseille-Corsica route, the public service delegation constitutes an essential element of the undertaking’s strategy and its viability.

(198) On the limitation of the aid to the minimum, France believes that it limited to the strict minimum the restructuring costs necessary to enable the restructuring to be carried out. To that effect, the French authorities note that, as the Commission recognised in its 2003 decision, the undertaking itself has contributed sufficiently to the restructuring plan from its own resources by virtue of the sale of assets for the amount of EUR 30,2 million. In addition, having regard to other sales made by SNCM for the amount of EUR 12,2 million, the total of the undertaking’s own contribution comes to EUR 42,38 million. France considers that that amount is much higher than the amount of own contributions necessary to approve the restructuring aid, which finally amounts to EUR 15,81 million, since the other measures are not State aid.

5.2.4. On the conditions imposed by the Commission decision of 2003 and the possible new compensatory measures

(199) Contrary to the contentions of STIM and CFF, the French authorities state that they complied with all of the conditions imposed by the 2003 decision, to which they were bound until the end of 2006, in particular the maintenance of the fleet of 11 vessels and the application of fares lower than those of competitors.

(200) Indeed, France considers that, under the new final decision, the level of compensatory measures to be imposed on SNCM must be adapted because the amount of restructuring aid was henceforth EUR 15,81 million rather than EUR 69,3 million.

(201) In that respect, France contests STIM’s observations concerning the possibility that the Commission may require SNCM to sell its shareholding in CMN as a compensatory measure. France contests STIM’s argument that the definition of strategic assets was called into question in the 2004 guidelines in relation to the 1999 guidelines.

(202) As regards the measures referred to by CFF, intended to reduce SNCM’s market presence, the French authorities recall that, as the Commission noted, moreover, in its 2003 decision (recital 87), there is no excess capacity in the markets concerned (France — Corsica & the Maghreb) and that a reconfiguration of services to Corsica under and outside the public service delegation would jeopardise the viability of the undertaking.

(203) As for the argument raised by CFF that the implementation of the measures described above in favour of SNCM involves a serious risk of eliminating its main competitor in the mainland France-Corsica market, namely CFF, the French authorities submit that, having regard to the current structure of the market in which CFF is market leader, the maintenance of a competitive structure depends on the authorisation of SNCM’s restructuring plan and the presence of the latter in the relevant market.

VI. ASSESSMENT OF THE MEASURES

6.1. EXISTENCE OF AID WITHIN THE MEANING OF ARTICLE 107(1) OF THE TFEU

(204) Article 107(1) of the TFEU provides: ‘Save as otherwise provided in this Treaty, any aid granted by a Member State or through State resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods shall, in so far as it affects trade between Member States, be incompatible with the internal market’.

(205) The classification of a national measure as State aid within the meaning of Article 107(1) TFEU requires the following cumulative conditions to be fulfilled, namely: (1) the measure in question confers a selective economic advantage; (2) that advantage is financed via state resources; (3) that advantage distorts or threatens to distort competition and, finally, (4) that advantage has an effect on trade between Member States (105).

(206) The Commission notes that SNCM received state resources totalling EUR 274,54 million (106) via CGMF, which is wholly owned by the State.

(207) Since SNCM operates in the maritime transport sector, which is open to competition within Europe, the potential economic advantage that it has received is likely to distort competition and affect trade between Member States.

(208) The fact that the cabotage market to the Mediterranean islands was, until 1 January 1999, temporarily exempt from the application of Regulation (EEC) No 3577/92 does not exclude prima facie that the subsidies granted for operating cabotage routes to the Mediterranean islands under a public service delegation could affect trade between Member States and distort competition.

(209) In any event, even if subsidies granted for operating cabotage routes could not affect trade between Member States or distort competition before 1 January 1999, the situation changed after that date since, in accordance with Regulation (EC) No 3577/92, cabotage activities were from then on open to all operators in the European Union. In addition, it should be stressed that SNCM does not carry on only cabotage transport but also operates in the international maritime market, which was liberalised by Council Regulation (EEC) No 4055/86 (107).

(210) Accordingly, the Commission considers that in the present case the last three criteria of Article 107(1) TFEU cited in recital 205 of this decision are fulfilled. It must therefore examine in turn, in respect of each measure, the existence of a selective economic advantage, in accordance with the judgment of the General Court of 11 September 2012.

6.1.1. Relevant period for the purposes of the assessment

(211) In accordance with the case-law of the General Court (108), the Commission must, after the annulment of one of its decisions, base its new assessment only on the information that was available to it on the date of adoption of the annulled decision, in this case 8 July 2008.

(212) Any events subsequent to 8 July 2008 must not, therefore, be taken into account. Changes that may have taken place in the market or in the situation of the aid beneficiary must be excluded from the analysis. Nor will the Commission consider the period of implementation of the restructuring plan from July 2008 onward (109).

(213) Similarly, the Commission is not under an obligation to start the investigation of the case afresh or even to supplement it by resorting to new technical expertise (110). The annulment of an act concluding an administrative procedure which comprises several stages does not necessarily entail the annulment of the entire procedure. Where, as in this case, in spite of the fact that investigation measures have been taken allowing an exhaustive analysis to be made of the compatibility of the aid, the analysis carried out by the Commission is incomplete, thus making the decision unlawful, the procedure for replacing that decision can be resumed at that point by means of a fresh analysis of the investigation measures taken previously (111).

(214) Moreover, since the Commission is required to base its new analysis solely on information which was available to it in July 2008, information in respect of which both the French authorities and SNCM had already defined their position, it is unnecessary to consult them afresh (112). Finally, with the publication of the decision to open the procedure in the Official Journal, the third parties concerned were ensured the right to submit their comments (113) and there is no provision in Regulation (EC) No 659/1999 requiring that that opportunity be made available to them again where the original restructuring plan has been amended during the investigation procedure (114).

(215) This decision is therefore based, in the main, solely on the information available on 8 July 2008. However, in the alternative, the Commission will demonstrate that it would not change its conclusions if account were taken of the note by the French authorities dated 16 May 2013 in relation to the facts referred to before 8 July 2008 and of the information submitted by SNCM on 27 August 2013.

6.1.2. The sale of SNCM at a negative price of EUR 158 million

(216) In the present case, the Commission must examine whether the EUR 158 million capital contribution by the State prior to the sale of SNCM to private purchasers, that is, ultimately, the ‘negative sale price’ of the undertaking of exactly the same amount, does not contain elements of State aid.

(217) An open, transparent and non-discriminatory public selection procedure at the end of which the State disposes of the undertaking after a prior recapitalisation (for an amount greater than the sale price) does not necessarily exclude the presence of aid, liable to benefit both the privatised undertaking and the purchaser of that undertaking (115).

(218) In order to determine whether an undertaking has obtained an economic advantage from a capital contribution by the State, the Commission generally applies the principle of a ‘private investor operating in a market economy’ (‘the private investor principle’), provided that the beneficiary is not liable for the reimbursement of other forms of State aid and that the contribution is subject to analysis with reference to the said principle. The private investor principle is an expression of the principle of equal treatment of public and private sectors, pursuant to Article 345 TFEU. According to that principle, capital made available to an undertaking by the State, directly or indirectly, in circumstances which reflect normal market conditions