2000/75/EC: Commission Decision of 20 July 1999 on State Aid granted by Germany to SKET Maschinen- und Anlagenbau GmbH (notified under document number C(1999) 2538) (Text with EEA relevance) (Only the German version is authentic)
Date: 1999-07-20
Institutions: European Commission
Subjects: Germany, State aid, aid for restructuring, industrial restructuring, production aid, working capital

4.2.2000

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Official Journal of the European Communities

L 30/25

COMMISSION DECISION

of 20 July 1999

on State Aid granted by Germany to SKET Maschinen- und Anlagenbau GmbH

(notified under document number C(1999) 2538)

(Only the German version is authentic)

(Text with EEA relevance)

(2000/75/EC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

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

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

the

Industriebeteiligungen GbR) had withdrawn from the
restructuring plan at
end of 1995, and the
Commission had been notified of a new plan with
additional aid measures. The new plan envisaged, inter
alia, setting up several successor companies to operate
the profitable parts of SKET SMM which could be
salvaged from the bankrupt company. SKET MAB was
one of these successor companies.

on

called

interested

Having
their
comments (1) pursuant to Article 88(2) of the EC Treaty and
Article 6(1) of Council Regulation (EC) No 659/1999 of 22
March 1999 laying down detailed rules for the application of
Article 93 of the EC Treaty (2),

submit

parties

to

Whereas:

I

(1)

SKET Maschinen- und Anlagenbau GmbH ((cid:145)SKET MAB(cid:146))
is an economic successor to SKET Schwermaschinenbau
Magdeburg GmbH, Magdeburg ((cid:145)SKET SMM(cid:146)). On 15
March 1995 the Commission decided to initiate the
formal investigation procedure in respect of State Aid
granted to SKET SMM (3). The proceedings
also
concerned SKET SMM subsidiaries Entstaubungstechnik
Magdeburg
and
Drahtziehmaschinenwerk Gr(cid:252)na GmbH, Chemnitz
((cid:145)DZM(cid:146)). SKET SMM had received the aid in question
before, and in the course of,
its privatisation and
restructuring. Prior to that, SKET SMM had already been
granted aid to which the Commission had not objected
(NN 46/93 and NN 95/93). The proceedings were given
the number C 16/95.

Magdeburg

GmbH,

((cid:145)ETM(cid:146))

(2) On 30 July 1996 the Commission decided to extend the
C 16/95 proceedings to include the State Aid paid since
the date of the initiation decision and not covered by
that decision (4). The investors (Oestmann & Borchert

(1) OJ C 79, 14.3.1998, p. 4.
(2) OJ L 83, 27.3.1999, p. 1.
(3) OJ C 215, 19.8.1995, p. 8; OJ C 298, 9.10.1996, p. 2.
(4) OJ C 298, 9.10.1996, p. 2.

(3)

proceedings

In October 1996 SKET SMM was forced to file for
(insolvency
Gesamtvollstreckungsverfahren
proceedings in the new L(cid:228)nder). The plan which had
formed the subject of the initial decision of 30 July had
not restored SKET SMM to viability. On 26 June 1997
the Commission adopted the negative final Decision
97/765/EC (5) with regard to the aid for SKET SMM. The
insolvency proceedings did not apply to the two
subsidiaries ETM and DZM, which were transferred to
the Bundesanstalt
f(cid:252)r vereinigungsbedingte Sonderaufgaben
((cid:145)BvS(cid:146) (cid:151) the Federal Office for Special Unification-
related Tasks). Decision 97/765/EC terminated case C
16/95 only in respect of that part of SKET SMM which
was covered by the insolvency proceedings. The case
was therefore split into three separate parts as follows:
C 16A/95 for SKET SMM, C 16B/95 for ETM and C
16C/95 for DZM.

(4)

To reflect the new reality that SKET SMM’s successor
companies were taking independent courses of action,
each of them was allocated a different case number.
SKET MAB was given the number NN 122/97. This
decision relates only to SKET MAB.

(5) On 21 October 1997 the Commission decided to
initiate the Article 88(2) procedure in respect of aid
granted to SKET MAB, and the file was given the
number C 69/97. By letter dated 10 November (SG(97)
D9269) the Commission advised the German authorities
of its decision. The letter was published in the Official
Journal of
the European Communities on 14 March
1998 (6). Although interested parties were invited to
submit comments, none were received.

(5) OJ L 314, 8.11.1997, p. 20.
(6) OJ C 79, 14.3.1998, p. 4.

(6)

(7)

(8)

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Official Journal of the European Communities

4.2.2000

took

By letter dated 2 April 1998 (registered as received by
the German
the Commission on the same date),
authorities advised the Commission that SKET MAB had
been privatised and provided some details of
the
privatisation. By letter dated 25 May (registered as
the
received by the Commission on the same date),
German authorities replied to the Commission’s letter of
11 May and provided additional details on SKET MAB’s
privatisation. The Commission sent final questions on
29 October together with an information injunction. A
between
meeting
representatives of the Federal Government, the investors
and the Commission to discuss the proposed answers. It
emerged from this meeting that the description of the
restructuring plan submitted by the German authorities
did not tally with the plan approved by the investors.
By letter dated 28 January 1999 (registered as received
by the Commission on 29 January),
the German
Government submitted a redrafted restructuring plan.
The German authorities submitted further information
on
the
Commission on 5 February) and 16 April (registered as
received by the Commission on 19 April).

14 December

(registered

February

received

place

on

by

as

1

SKET MuV GmbH began. The five salvaged businesses
are:

(cid:151) SKET MAB,

(cid:151) SKET Walzwerkstechnik GmbH (8),

(cid:151) SKET (cid:214)lsaatentechnik GmbH (later

renamed

Cimbria SKET GmbH) (9),

(cid:151) SKET Maschinenbau-EDV GmbH (10),

(cid:151) SKET Verseilmaschinenbau GmbH (11).

(9)

In addition to the above there are two subsidiaries,
ETM (12) and DZM (13), which were transferred to the
BvS before
instituted
against SKET SMM.

insolvency proceedings were

II

III

the

economic

SKET MAB’s problems derive from the nature of SKET
SMM,
from which it emerged. SKET SMM was a
conglomerate designed to operate in a centralised
command economy. Attempts to privatise it as a single
company when
environment was
transformed into a competitive market were hampered
by its cumbersome, fragmented organisational structure.
Restructuring of the conglomerate in its entirety began
early on but had not been completed when the
Commission reached its negative decision on the various
aid schemes for SKET SMM notified in 1994. The
also concerned the potentially profitable
measures
components of the conglomerate,
including the heavy
machinery manufacturing operation. By the time SKET
SMM filed for insolvency proceedings in October 1996,
the German authorities had modified their original
the potentially
strategy and had resolved to extract
from the conglomerate and to
profitable activities
continue operating
autonomous
smaller,
them as
economic units.

of

the

restructuring

((cid:145)SKET MuV(cid:146)),
preparation

In order to achieve this, the BvS set up a commercially
inactive coordinating company, SKET Management- und
Vertriebsgesellschaft GmbH (7)
to
for
supervise
privatisation
autonomous
companies, also owned by the BvS. All were small- or
medium-sized enterprises. SKET MuV, acting on the
instructions of
the BvS, was entrusted with finding
investors and negotiating the privatisation of the five
salvaged companies. The last of the five companies was
privatised in April 1998 and the process of dismantling

and
commercially

five

(7) State aid NN 67/97.

(10)

(11)

SKET MAB is based in Magdeburg, Saxony-Anhalt,
Germany. In 1997 it employed some 115 persons, had
a turnover of DEM 39 million and a balance sheet total
of DEM 54 million. It manufactures heavy machinery of
all
types to order. Under the proposed restructuring
plan it will gain additional downstream operations
relating to wind turbine production.

SKET MAB was
registered as a company in the
Magdeburg trade register on 8 November 1996 with a
share capital of DEM 50 000. The BvS was the sole
shareholder. On 22 November SKET MAB entered into
an agreement with the liquidator of SKET SMM to take
over that company’s machinery and plant.

(12) Under the privatisation contract of January 1998 two
investors,
the Enercon Group, acting through Aloys
Wobben, and the LMB Group, acting through Heinz
Buse, each acquired 50 % of the shares in SKET MAB.

(13)

The Enercon Group is a business group comprising
companies owned by Aloys Wobben,
in particular
Enercon GmbH, a company based in Lower Saxony,

(8) State aid C 70/97.
(9) Aid to this firm was approved by the Commission in April 1999

(Case NN 125/97).

(10) Aid to this firm was approved by the Commission in May 1998

(Case NN 126/97).

(11) Aid to this firm was approved by the Commission in November

1998 (Case C 72/97).

(12) State aid C 16B/95.
(13) Aid to this firm was approved by the Commission in May 1998

(Case C 16C/95).

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Germany, as well as associated companies. The group
and installs wind turbines
develops, manufactures
worldwide. The Enercon Group is not a SME;
in
December 1998 it had 1 200 employees and its 1997
turnover amounted to DEM 396 million. Enercon has
leader in the wind turbine
become a world market
market and has the largest market share in Germany.

(14)

The LMB Group is a business group comprising
companies owned by Heinz Buse, in particular Logauer
Maschinenbau GmbH and associated companies. Heinz
Buse is the majority shareholder
in Logauer
Maschinenbau GmbH, a company based in Lower
Saxony, Germany.
purpose
the same market as SKET MAB) and
machinery (i.e.
supplies
for wind
the Enercon Group with parts
turbines. It is not a SME. In 1997 it had a turnover of
DEM 88 million.

produces

general

(75 %)

It

(18)

IV

(15) On 16 January 1998 a contract was concluded for the
sale of shares in SKET MAB between the BvS as vendor
and Aloys Wobben and Heinz Buse as purchasers. The
sale took the form of an open invitation to tender. After
a list of
investors had been drawn up by the West
Merchant Bank and the privatisation notice had been
published in the press, documentation was sent to 44
potential
investors. Of those, only eight applied. The
investors’ bid was the best submitted.

(16)

The purchase price of DEM 1 was paid to the BvS. The
investors took over a bank guarantee of DEM 5 million
from the BvS. The contract
featured penalty clauses
concerning the number of employees at SKET MAB and
the site location. The contract also contained restrictions
on profit withdrawals from SKET MAB by the buyers.
The Enercon Group also agreed to include two new
units in SKET MAB. Although these units were to have
a distinct legal status, they would form an integral part
of SKET MAB’s operations.

(19)

V

(17) One of

the problems faced by the unit which was
eventually to become the legally distinct SKET MAB

its

large

integration into a

company was
and
cumbersome conglomerate, SKET SMM, which was
designed to operate in a centrally planned economy.
This was reflected in SKET SMM’s internal business
infrastructure.
organisation as well as in its physical
into
Because it also took social policy objectives
account, SKET SMM was grossly overstaffed from a
market economy perspective.
the unit
which was eventually to become SKET MAB suffered
from general neglect and underinvestment. Externally,
SKET SMM’s integration into and dependency on other
centrally planned economies meant that SKET SMM and
then SKET MAB sales were disrupted when those
economies were subsequently transformed into market
economies, with turnover suffering as a result.

In addition,

but

also

entity,

SKET MAB,

the above, one of

In view of
the key steps in the
restructuring involved identifying the core, profitable
activity of heavy machinery manufacturing within SKET
from the old operation
SMM and then extracting it
together with the relevant assets and re-establishing it as
a going concern. This entailed not only creating a new
legal
eliminating
dependency on other SKET operations, so that future
relations between SKET SMM’s successor companies
would be based on market principles.
It also meant
creating separate physical infrastructure for SKET MAB
and concentrating activities on the smallest site required.
The workforce also needed to be reduced. In addition,
various measures had to be undertaken to remedy
underinvestment.
to preserve the goodwill
associated with the SKET name in the traditional sales
areas,
awarded
previously to SKET SMM had to be honoured. At the
same time, a new customer base had to be developed
for SKET MAB. Following privatisation in the Enercon
and LMB Groups, the final phase of the restructuring
saw SKET MAB established as a commercial
joint
venture of its parent companies.

certain heavy machinery contracts

In order

to

up

and

two

new

setting

relation

produces

the wind-turbine market.

SKET’s economic integration into the Enercon Group
involved
operations:
Rotorblattfertigung GmbH ((cid:145)Roma(cid:146)), which makes wind
turbine rotors, and Generatorenfertigung und Assembly
GmbH ((cid:145)Gema(cid:146)), which
assembles
generators. These will enhance SKET MAB’s traditional
operations by providing it with downstream capabilities
These
in
capabilities do not involve an expansion of SKET MAB’s
capacity. Although forming an integral part of SKET
MAB in economic terms,
these new operations have
been given a distinct legal personality for reasons of
product liability and protection of industrial know-how.
The operations are physically so integrated into SKET
MAB’s production process that it would be difficult for
them to be sourced from third parties. The Enercon
Group provided training in order to familiarise SKET
MAB personnel with the new operations.

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(20)

(21)

Economic integration into the LMB Group will benefit
to managerial
SKET MAB by
know-how. Heinz Buse is personally involved in SKET
MAB’s day-to-day operations.

providing

access

In addition to the reorganisation arrangements described
above, provision had to be made for SKET MAB’s
capital and financing requirements between the time
when
from SKET SMM and
privatisation.

extracted

it was

(b) financing of working capital and capital assets for

SKET MAB: DEM 43,7 million;

(c) pre-financing for completion of contracts: DEM 3,7

million;

(d) financing

SKET MAB’s
restructuring: DEM 15,1 million;

of

post-privatisation

(22)

The restructuring plan is to be implemented between
1996 and 1999. According to the German authorities,
it will be completed on time.

(23)

The total cost of restructuring SKET MAB is DEM 83,1
million, broken down as follows:

(a) DEM 4 million to keep machine production
operations running when they were part of
the
failed SKET SMM;

(e)

finance to set up the new Roma and Gema
downstream operations: DEM 14,7 million;

(f)

training for SKET MAB employees: DEM 1,9
million.

(24) Under

the restructuring plan,

the firm should be
restored to profitability in 1999 (see key data in the
following table). The 1999 figures
are based on
projections made at the time of privatisation.

1997

1998

1999 (Plan)

(in DEM)

Turnover

39 680 000

45 618 000

66 441 000

Material costs

28 170 200

28 590 000

23 850 000

Personnel costs

12 140 277

15 999 000

27 400 000

Depreciation

1 450 500

2 947 200

Operating result

ﬂ 1 249 677

ﬂ 1 218 800

Profit/loss

ﬂ 2 226 277

ﬂ 3 760 000

4 521 000

5 071 000

5 291 000

NB: This chart contains only a selection of key data and the columns are not arithmetically complete.

(25)

It should be noted that the projected growth in turnover
is reflected in SKET MAB’s order book and is based on
the investors’ involvement. For example, the proportion
of
turnover from wind turbine production currently
amounts to 45 % for 1999. In addition, SKET MAB’s
order book clearly shows that its economic future no
longer depends upon contracts from other SKET SMM
reflect
successor companies. Higher personnel costs
increased activity and the acquisition of the Roma and
Gema
downturn in
material costs reflects SKET MAB’s ability to negotiate
supply contracts on more favourable terms. The two
parent companies, Enercon and LMB, which operate in

downstream operations. The

different markets, are profitable, expanding concerns
and have cooperated together for more than twelve
years.

VI

(26)

The aid package as notified by the German authorities
on privatisation amounted to DEM 57,8 million. The
Commission has established that the investors were also
granted DEM 3,9 million for the period 1998 to 2000

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an

aid

(27th

scheme

approved

under
outline
the joint Federal Government/L(cid:228)nder
programme for
scheme for improving regional economic structures).
The Commission does not need to reassess this measure
but will
include the amounts in the evaluation of
proportionality.

(27)

This concerns the following aid measures:

Source

Type

DEM

BvS

BvS

BvS

Grant to finance working capital
and capital assets

40 000 000

Grant for the purchase of stocks

3 700 000

Loan for SKET SMM’s heavy
machinery manufacturing
operations and subsequent waiver
of repayment

4 000 000

BvS

Grant for final restructuring costs

10 100 000

57 800 000

(28)

In addition, a contract pre-financing grant of DEM 3,6
million was repaid by the investors as part of
the
privatisation. The original aid package as notified in July
1997 amounted to DEM 79,2 million.

(29)

(30)

There is no additional aid component to be taken into
account,
since the Enercon and LMB groups were
selected as investors in SKET MAB following an open
and unconditional invitation to tender, with the best bid
being chosen.

investor

The
million, broken down as follows:

contribution amounts

to DEM 25,3

Application

DEM

Investment in SKET MAB

5 000 000

Training costs for SKET MAB employees

1 900 000

Loan repayments plus interest

3 700 000

Investments (Roma and Gema operations of
SKET MAB)

13 000 000

Start-up costs (Roma and Gema operations
of SKET MAB)

1 700 000

25 300 000

VII

(31)

The traditional relevant market on which SKET MAB
operates is that for the manufacture of made-to-order
heavy machinery, of which a significant part (45 % of
orders in 1999) is the wind turbine market as a result of
the
the company’s integration into Enercon and of
the
Roma
restructured SKET MAB is also active on the market for
rotor and turbine assembly.

operations. Accordingly,

and Gema

faces

(32) As far as its general activity is concerned, SKET MAB’s
customers are firms and technical operations in various
branches of
industry requiring the manufacture of
components or complete plants on the basis of plans,
designs and specifications. At present, the firm is mainly
active on the German market, and it
stiff
competition from low-wage countries such as Poland
and the Czech Republic. However, there is a growing
demand for quality and just-in-time production of
is
complex plants on site, and this market segment
growing in importance. SKET MAB has
therefore
focused on this segment,
in which quality, service,
logistics and working to deadlines are key factors. The
conditions of the market on which SKET MAB operates
is determined by demand on downstream markets. On
the basis of
the
Commission has no grounds to change the view it held
investigation procedure,
when it
namely that the market on which SKET MAB operates is
not affected by structural overcapacity.

information available

initiated the formal

to it,

the

(33) One such downstream market

is

prices

the wind turbine
for which SKET MAB (including Roma and
market,
Gema) will produce in particular. Wind power
in
Europe began in the mid-1970s in the wake of the oil
through a slump in the
crisis. The industry went
mid-1980s, with
prompting
low energy
intensified efforts to reduce costs and improve operating
efficiency. In recent years the wind power market has
recorded very significant growth, with large markets
developing in Denmark and, more recently, Germany,
which is now the largest market in the EU and indeed
is very
in the world. The outlook for this market
is
positive. Electricity generation from wind power
expected to grow rapidly as technological advances and
lower costs make it
increasingly competitive with
mainstream power-generation technologies (14). The
Commission has
structural
overcapacity on this market.

found no evidence of

(34) With regard to the new activities developed by Gema
and Roma, given that there is no structural overcapacity
on the wind turbine market, upstream markets, such as

(14) Panorama of EU industry 1997, I-50.

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that for the production of parts for the wind turbine
market, are also unlikely to suffer from overcapacity.

VIII

(35)

as
associated

investigation procedure was initiated in
The formal
the original aid package to SKET MAB
respect of
the Commission’s doubts concerning the
because of
compatibility of the aid as restructuring aid with the
the
common market.
In particular, on the basis of
the
information provided,
the Commission held that
restructuring plan was
the
regards
too vague
costs. The
and
restructuring measures
financial data provided was also insufficient and it was
not clear whether the company could be turned into a
profitable business within a reasonable period of time.
The lack of information on the development of SKET
MAB’s capacity also meant that it was hard to identify
the impact of the aid on its competitors. The lack of
information on the restructuring measures and their
cost meant
to determine
whether the aid was limited to the minimum necessary
for the restructuring. The lack of a private investor
interested in taking over SKET MAB when the formal
investigation procedure was
initiated increased the
Commission’s doubts.

it was also difficult

that

IX

(36)

The above aid measures are caught by Article 87(1) of
the EC Treaty for the following reasons.

(37)

SKET MAB is a company operating in a relevant market
which extends across Member States, and therefore
trade between Member States is affected. Aid by its very
nature tends to distort competition. The aid awarded to
SKET MAB by the German authorities are therefore
caught by Article 87(1) of the EC Treaty. Article 87(2)
and (3) of
the Treaty provide for the possibility of
exempting aid caught by Article 87(1). For the reasons
set out below,
for exempting the
restructuring aid to SKET MAB, a firm in difficulty, is
Article 87(3)(c).

the sole basis

(38)

The aid was granted to a company which the BvS had
founded when insolvency proceedings were initiated
against another economic entity. Although operating via

the legal person of SKET SMM GmbH, the latter entity
was in reality a cluster of diverse economic operations
which had been undergoing restructuring over several
years. The new SKET MAB company is a continuation
of part of SKET SMM’s heavy machinery operations. The
BvS strategy, as modified, was to provide the new
company with capital and resources in order to privatise
it on a stand-alone basis. The distinguishing feature of
this arrangement is that SKET SMM GmbH, which had
been in continuous state ownership since 1990, could
never have been privatised as a single or group
economic unit. These circumstances distinguish the
companies
present
(Auffanggesellschaften)
the
winding-up of a company which had already been
privatised.

created in the wake of

from those

rescue

case

(39) When it acquired legal personality, SKET MAB,

command economy. The

the potentially viable operations

the
heavy machinery manufacturing operation, was not
viable as an independent firm. As noted above, SKET
SMM’s heavy machinery operation was not founded and
operated as a distinct business, but was designed to
function in a
resulting
problems led to the eventual collapse of SKET SMM.
Unless
could be
extracted from SKET SMM for further restructuring as
independent concerns, the successor operations would
continue to face the same problems. The aid granted to
SKET MAB, which took over parts of the assets and
resources of a bankrupt company, may be treated as
restructuring aid. This is justifiable both in view of the
particular historic and economic circumstances of the
companies, which were obliged to readjust rapidly from
a centralised economic system to a market system, and
in view of
the role played by the BvS (successor
organisation to the Treuhandanstalt) in this re-adjustment.

(40)

(41)

the EC Treaty is relevant.

In the light of the above, the Commission takes the
view that the exemption provided for in Article 87(3)(c)
of
the
requirements for exemption under this Article, the aid
must satisfy the criteria set out in the guidelines on state
aid for rescuing and restructuring firms in difficulty (15).

In order to meet

the guidelines are met, and it will

The Commission considers that rescue and restructuring
aid may contribute to the development of economic
activities without adversely affecting trade against the
Community interest if the conditions set out in Section
3 of
therefore
authorise such aid under those conditions. Where the
restructured are located in
firms to be rescued or
regional
assisted areas,
into
considerations under Article 88(3)(a) and (c)
account
the
as described in paragraph 3.2.3 of
guidelines.

the Commission will

take

(15) OJ C 368, 23.12.1994, p. 12.

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(42)

The measures to be considered are those notified by the
German authorities in 1998, amounting to DEM 57,8
million,
loan for pre-financing
contracts amounting to DEM 3,6 million plus interest,
which were repaid by the investor on privatisation and
were intended as restructuring aid.

together with the

has downsized its premises and workforce as part of the
In addition, SKET MAB’s
restructuring arrangements.
existing machine production capacity did not expand
when Gema and Roma were set up. The two new
this activity and are
operations are downstream of
integration into
necessary components of
successful
Enercon and thus crucial
to SKET MAB’s return to
viability.

(43)

(44)

X

(49)

To meet the criteria in the guidelines, all restructuring
plans must restore companies in difficulty to long-term
viability within a reasonable time scale and on the basis
of realistic assumptions.

the
The notice published in the Official
European Communities
to the
German authorities called on interested parties such as
competitors to submit their comments. No replies were
received.

setting out

Journal of

the letter

including

integration into

faced by the operation which was
The problems
eventually to become SKET MAB and the measures
them are outlined above. The
required to address
pre-privatisation measures addressed some of
those
problems and the post-privatisation measures tackle the
remainder,
the parent
companies. Dependency on other SKET SMM successor
companies was ended and SKET MAB gained access to
new geographic and product markets. The two investor
groups are successful operations which also have a good
record of working together. SKET MAB’s economic
performance is in line with the projections made at the
time of privatisation. The investing companies have
already made an impact on SKET MAB’s order books
liability within a reasonable
and the restoration of
timescale seems realistic.

(50) Although SKET MAB is to be run as a joint venture by
these groups are not
the Enercon and LMB groups,
active on the same markets and the agreement between
them as described by the German authorities will not
otherwise distort competition in the common market.

(51)

The Commission concludes that the aid to SKET MAB
will not result in undue distortion of competition.

XII

(45)

The Commission concludes that
guidelines has been met.

this criterion of

the

XI

(46) A further

condition

for
under
restructuring aid to be acceptable is that the aid must
not give rise to undue distortion of competition.

guidelines

the

(47)

In the case of structural excess of production capacity
on the relevant market, the guidelines require the aid
recipient
to reduce capacity on a permanent basis.
Where there is no structural excess of production
required, but a capacity
capacity no reduction is
increase is not normally allowed.

(52) A further

the

condition

guidelines

for
under
restructuring aid to be acceptable is that the amount
and intensity of the aid must be limited to the strict
minimum needed for restructuring and must be related
to the benefits anticipated from the Community’s point
of view.
are also expected to make a
significant contribution to the restructuring plan from
their own resources.

Investors

(53)

In this case, the total aid package from the BvS amounts
to DEM 57,8 million. This amount comprises a loan of
DEM 43,7 million from the BvS to purchase working
and investment capital and to build up stocks of
components and acquire equipment from SKET SMM. A
further element of the package consists of a loan of
DEM 4 million granted by the BvS to the administrator.
SKET MAB has also received a loan of DEM 10,1
million to continue restructuring. The DEM 3,99 million
granted under
the joint Federal Government/L(cid:228)nder
scheme must be added to the total amount of new aid
for the purpose of assessing whether the aid is in
proportion to restructuring costs and benefits.

(48) As noted above, the Commission has no evidence that
the relevant sectors, the heavy machinery manufacturing
operation, of which the wind turbine market forms a
sub-part, suffer from a structural excess of production
capacity, and therefore SKET MAB is not required to
reduce its capacity on a permanent basis. However, it

(54) Although the purchase price was only DEM 1,

the
investors committed themselves to providing DEM 5
million for the restructuring of SKET MAB. They will
finance training for SKET MAB employees to the tune
of DEM 1,9 million. They agreed to repay a loan of

L 30/32

EN

Official Journal of the European Communities

4.2.2000

DEM 3,6 million granted to SKET MAB and associated
interest of DEM 100 000. Since the restructuring plan
involves expanding SKET MAB by adding the Roma and
Gema operations, the investors’ commitment to these
operations must also be taken into account. The
investors will put DEM 13 million into Roma and Gema
and will finance the start-up costs of DEM 1,7 million.
The investors’ contribution to the restructuring is
therefore DEM 25,3 million, or DEM 21,31 million,
the DEM 3,99 million in joint
taking into account
to the
Federal Government/L(cid:228)nder
investors.

granted

funds

(55)

(56)

The total restructuring costs therefore amount to DEM
have
83,1 million,
contributed about 25 %. The investors’ contribution may
therefore be regarded as reasonable.

of which

investors

private

In view of the above, the Commission concludes that
the concerns it expressed when it initiated proceedings
have been addressed, and that the criterion concerning
proportionality of aid has been complied with.

HAS ADOPTED THIS DECISION:

Article 1

The measures which Germany has implemented for SKET
MAB, Magdeburg and the heavy machinery manufacturing
operation of SKET SMM amounting to DEM 57,8 million are
compatible with the common market within the meaning of
Article 87(3)(c) of the EC Treaty and Article 61(3)(c) of the
EEA Agreement. The relevant aid comprises:

(a) a grant by the BvS to finance working capital and capital

assets (DEM 40 million);

(b) a grant by the BvS for the building-up of stocks (DEM 3,7

million);

(c) a loan for the heavy machinery manufacturing operation
(DEM 4

of SKET SMM and the waiver of repayment
million);

XIII

(d) a grant for the final phase of restructuring (approximately

DEM 10,1 million).

(57) A further condition of

is

that

the guidelines

the Commission will

the
restructuring plan submitted to and accepted by the
Commission must be
fully implemented and any
obligations laid down by the Commission decision must
be discharged. Otherwise, unless the original decision is
amended following a new notification from the Member
take steps to require the
State,
recovery of the aid. Important parts of the restructuring
plan, such as the setting-up of Roma and Gema, have
already
have
been
the remaining components
undertaken to implement
within two years. As stated above,
the two investor
groups have a long history of cooperation, so there is
little reason to assume that they will dissolve the joint
venture.
the German Government has
provided assurances that all possible measures will be
taken to ensure that
the plan is carried out. The
Commission therefore concludes that this part of the
guidelines has also been complied with.

implemented.

In addition,

investors

The

Article 2

The loan of DEM 3,6 million which Germany granted to SKET
MAB and which was repaid by the investors in SKET MAB is
compatible with the common market within the meaning of
Article 87(3)(c) of the EC Treaty and Article 61(3)(c) of the
EEA Agreement.

Article 3

Germany
implementation of the restructuring plan.

detailed

submit

shall

a

annual

report

on

Article 4

XIV

This Decision is addressed to the Federal Republic of Germany.

(58)

aid measures detailed above

The Commission finds that Germany has unlawfully
implemented the
in
violation of Article 88(3) of the EC Treaty. However, in
view of the above, the Commission concludes that, in so
far as these measures comply with the guidelines on
restructuring aid, they are compatible with the common
market,

Done at Brussels, 20 July 1999.

For the Commission

Karel VAN MIERT

Member of the Commission