2003/85/EC: Commission Decision of 18 July 2001 on the State aid C 35/2000 (ex NN 81/98) implemented by the Federal Republic of Germany for Saalfelder Hebezeugbau GmbH, Germany (notified under document number C(2001) 2347) (Text with EEA relevance)
Date: 2001-07-18
Institutions: European Commission
Subjects: Germany, State aid, control of State aid, hoisting equipment, industrial restructuring

14.2.2003

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Official Journal of the European Union

L 40/1

II

(Acts whose publication is not obligatory)

COMMISSION

COMMISSION DECISION

of 18 July 2001

on the State aid C 35/2000 (ex NN 81/98) implemented by the Federal Republic of Germany for
Saalfelder Hebezeugbau GmbH, Germany

(notified under document number C(2001) 2347)

(Only the German text is authentic)

(Text with EEA relevance)

(2003/85/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,

Having called on interested parties to submit their comments
pursuant to the provisions cited above (1),

Whereas:

1. PROCEDURE

(1)

of

favour

By letter dated 10 July 1998, registered as received on
the same day, Germany notified the Commission of
restructuring measures
Saalfelder
in
Hebezeugbau GmbH (SHB) in accordance with Article
88(3) of the EC Treaty. As part of the aid had already
been paid out, the measures were registered under aid
number NN 81/98. By letter dated 18 August 1998, the
Commission requested additional
information from
Germany which was provided by letters dated 21
September 1998,
on 22
September 1998, and 18 December 1998, registered as
received on 4 January 1999. By letter dated 13 July
1999, registered as received on 19 July 1999, Germany
informed the Commission of its intention to withdraw

registered

received

as

the notification. By letter dated 27 August 1999, the
Commission informed Germany that the withdrawal had
not been accepted. Germany submitted additional
information by letter dated 20 September 1999,
received on 22 September. On 8
registered as
November
further
questions which were answered by letters dated 13
December 1999, registered as received on 20 December
1999, and 12 January 2000, registered as received on
14 January 2000.

the Commission

asked

1999

By letter dated 17 July 2000, the Commission informed
Germany that it had decided to initiate the procedure
laid down in Article 88(2) of the EC Treaty in respect of
the aid. Moreover, it issued an information injunction.

The Commission decision to initiate the procedure was
the European
published in the Official
Communities (2). The Commission invited interested
parties to submit their comments on the aid.

Journal

of

of

the

and

the procedure

By letter dated 26 September 2000,
registered as
received on 3 October 2000, Germany replied to the
opening
information
injunction. Further questions were sent to it by letter
dated 28 December 2000 and answered by letter dated
27 February 2001, registered as received on 3 March
2001. A meeting with the German authorities was held
on 7 March 2001. Additional
information was
requested by letter dated 8 March 2001. Answers were
received by letters dated 22 March 2001, registered as
received on 23 March 2001, and 3 April 2001,
registered as received on 5 April 2001.

(2)

(3)

(4)

(1) OJ C 27, 27.1.2001, p. 44.

(2) OJ C 27, 27.1.2001, p. 44.

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Official Journal of the European Union

(5)

The Commission received no comments from interested
parties.

14.2.2003

(in DEM)

2. DESCRIPTION

2.1. The aid recipient

SHB is active in the field of crane technology, which
represents 68 % of
its turnover, and components for
mechanical engineering and for transport, storage and
transmission systems.
it provides related
customer services, including the supply of replacement
parts.

In addition,

No

Measure

Amount

8

9

10

11

Wage-cost subsidies

Grants to promote innovation

Grants for advertising

Trade fair attendance and sales
promotion grants

240 304

120 430

48 837

4 050

Total

4 723 784

a

large

In 1997 the company had 135 employees and a
turnover of DEM 15 963 000. As it is not more than
25 %-owned by
the
definition of a small or medium-sized enterprise (SME),
the
it qualifies as an SME within the meaning of
Commission
1996
concerning the definition of small and medium-sized
enterprises. (3).

recommendation

3 April

satisfying

company

of

(11) Measure 1: investment allowances were granted between
1992 and 1997 under the two investment allowance
laws of 1991 to 1992 (4) and 1993 to 1996 (5).
regional
Measures
investment aid under Article 87(1) of the EC Treaty and
have been approved by the Commission on the basis of
the derogation in Article 87(3)(a). The allowances are
covered by the relevant aid schemes and are therefore
regarded as existing aid.

qualify

under

these

laws

as

(6)

(7)

(8)

SHB is situated in Saalfeld, Thuringia, an assisted area
under Article 87(3)(a) of the EC Treaty.

2.2. Background

(9)

At the time of the German Democratic Republic, SHB
belonged to the State-owned corporation TAKRAF. In
1993, following an open, transparent and unconditional
competitive tender, SHB was sold to the Gresse Gruppe,
which comprised Gresse GmbH Kranbau Wittenberg
and Barlebener Kranbau GmbH (BAKRA), and to three
private investors. The purchase price was DEM [(cid:133)] (*).

(10)

the

restructuring SHB benefited from the
Before
following public financial measures amounting to DEM
4 723 784 between 1992 and 1997:

No

Measure

Amount

(in DEM)

1

2

3

4

5

6

7

Investment allowances

Grants to promote research and
development

Employee integration grants

Short-time-working grants

Investment grants

211 612

459 630

81 402

792 503

1 265 016

ERP loan (development programme)

1 000 000

Loan from the Reconstruction Loan
Corporation (SME programme)

500 000

(3) OJ L 107, 30.4.1996, p. 4.
(*) Business secret.

(12) Measure 2: the company received grants amounting to
DEM 459 630 between 1992 and 1997 under an
approved aid scheme for promoting research and
development activities of SMEs in the new L(cid:228)nder (6).
The grants are covered by that scheme and are therefore
regarded as existing aid.

(13) Measure 3: in 1992 and 1994 to 1997 grants for the
integration of elderly employees amounting to DEM
81 402 were provided on basis of Section 217 of the
Social Security Code (Sozialgesetzbuch: Drittes Buch (cid:151)
SGB III). They are a general measure and so do not
constitute State aid within the meaning of Article 87(1)
of the EC Treaty.

(14) Measure 4: in 1993, 1995 and 1996 short-time-working
grants amounting to DEM 792 503 were provided on
basis of the Labour Promotion Law (Arbeitsf(cid:246)rderungs-
gesetz). They are made available directly to individuals
as compensation for reduced income and do not benefit
fall within the
the company. Therefore they do not
scope of Article 87(1) of the EC Treaty.

(15) Measure 5: between 1994 and 1997 investment grants
amounting to DEM 1 265 016 were provided under the

(4) Investitionszulagengesetz 1991 to 1992 (C 59/91, SG (92) D/8068

of 18.6.1992).

(5) Investitionszulagengesetz 1993 to 1996 (N 561/92, SG (92)

D/16623 of 24.11.1992).

(6) Personalf(cid:246)rderung Ost (cid:145)Zusch(cid:252)sse zur St(cid:252)tzung des Forschungs- und
in kleinen und mittleren Unternehmen im

Entwicklungspotentials
Beitrittsgebiet(cid:146) (N 477/91, SG (91) D/22704 of 25.11.1991).

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for

for

the

plan

joint

outline

scheme

23rd
Federal
improving regional
Government/L(cid:228)nder
economic structures, a regional aid scheme approved by
the Commission (7). This scheme had been approved by
the Commission as a regional investment aid scheme on
the basis of the derogation in Article 87(3)(a) of the EC
Treaty. The grants are covered by the scheme and thus
constitute existing aid.

(16) Measure 6: a loan amounting to DEM 1 000 000 was
granted to the company in 1995 under
the ERP
development programme, an aid scheme approved by
the Commission (8). It is covered by the scheme and
thus constitutes existing aid. In 1997 it was converted
into a private bank loan.

(17) Measure 7: a loan amounting to DEM 500 000 was
granted to the company in 1995 under
the SME
programme of the Reconstruction Loan Corporation, an
aid scheme approved by the Commission (9).
is
covered by the scheme and thus constitutes existing aid.
In 1997 it was converted into a private bank loan.

It

amounting

(18) Measure 8: between 1995 and 1997 the company
received wage-cost
to DEM
subsidies
240 304 on the basis of Section 249h of the Labour
Promotion Law. The subsidies were granted with a view
to promoting employment in the context of measures to
improve the environment. According to a Commission
these measures do not constitute State aid
decision,
within the meaning of Article 87(1) of
the EC
Treaty (10).

(19) Measure 9:

in 1996 and 1997 the company received
grants amounting to DEM 120 430 for the promotion
of innovation activities under an aid scheme approved
by the Commission (11). The grants are covered by that
programme and thus constitute existing aid.

(20) Measures 10 and 11: between 1994 and 1997 grants
amounting to DEM 48 837 were provided to the

(7) 23. Rahmenplan der Gemeinschaftsaufgabe zur Verbesserung der
regionalen Wirtschaftsstruktur: measures under this scheme qualify
as regional investment aid under Article 87(1) and were approved
by the Commission on the basis of
the derogation in Article
87(3)(a) (N 157/94, SG (94) D/11038 of 1.8.1994).

(8) N 563/C/94, SG(94) D/17293 of 1.12.1994.
(9) NN 24/96, SG(96) D/3475 of 29.3.1996.
(10) NN 117/92, SG(95) D/341 of 13.1.1995.
(11) Innovationsf(cid:246)rderung (cid:145)F(cid:246)rderung der Entwicklung neuer Produkte und
Verfahren in kleinen und mittleren Unternehmen in den neuen
Bundesl(cid:228)ndern(cid:146), (N 534/91, SG (92) D/3225 of 4.3.1992).

company for advertising measures. In 1996 an amount
of DEM 4 050 was granted to promote attendance at
trade fairs. These measures were granted in line with the
Commission notice on the de minimis rule for State
aid (12).

2.3. The restructuring

In May 1997 BAKRA, a company 100 %-owned by the
Gresse Gruppe, went bankrupt. As a consequence, the
financial situation of
the whole Gresse Gruppe was
threatened. SHB also ran into difficulties. Turnover fell
from DEM 19 278 502 in 1996 to DEM 15 962 850 in
1997. In 1996 SHB made a profit of DEM 2 103 000
whereas in 1997 losses amounted to DEM 1 486 595.
The company was faced with financial difficulties due to
the cancellation of credit insurance by suppliers, a loss
of confidence on the part of buyers and the freezing of
credit lines.

Separation from the Gresse Gruppe was regarded as
inevitable to secure the continuation of the company’s
business activities. The shares held by the Gresse
Gruppe were therefore temporarily taken over by SHB.
The contract was signed in April 1997 and the purchase
price was DEM [(cid:133)] (*).

2.3.1. The restructuring measures

a

further

In 1997 a restructuring plan was drawn up consisting
exchange
in
a
restructuring of
the firm’s activities. The plan was
modified in 1998. Germany submitted two restructuring
plans dated May 1997 and March 1998.

shareholders

and

of

The restructuring of the company was based on a new
company structure and the reorganisation of production
facilities. Most of the measures were supposed to be
implemented before the second half of 1998,
the
remaining measures in the first half of 1999.

(21)

(22)

(23)

(24)

(25)

The financial aspects of the restructuring plan were as
follows:

(in DEM)

1998

1999

2000

Turnover

34 540 000 29 540 000 30 040 000

Material costs

15 854 050 15 682 700 15 345 900

Staff costs

8 727 000

8 877 000

9 027 000

Depreciation

1 000 000

1 000 000

1 000 000

Profit

109 866

569 698

1 194 981

(12) OJ C 213, 19.8.1992, p. 2. See also Commission notice on the de

minimis rule for State aid (OJ C 68, 6.3.1996, p. 9).

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(26)

to restore the viability of

In order
the company,
turnover was supposed to increase in the following
years while costs were supposed to fall. The best
prospects for an increase in production were to be seen
in components and services. Costs were supposed to fall
following internal reorganisation.

(31)

company was forced to leave its old building owing to
the construction of a main road by the Erfurt city
authorities.

In this connection, the company received DEM 950 000
from the city of Erfurt as compensation for the old
building. This payment does not constitute State aid as
it is compensation for damages caused to the company.
submitted a report by an
As proof, Germany has
independent consultant confirming this figure and the
fact
compensation was paid at market
conditions. The costs covered by this payment of DEM
950 000 were not included in the restructuring plan
since they do not constitute a restructuring measure.

that

the

(32)

In addition, the restructuring plan included the purchase
and modernisation of equipment and machinery with a
view to rationalising production and reducing costs.
Lastly, computer software and hardware were also to be
renewed. The costs of these investments were put at
DEM 997 000.

(33) An amount of DEM 860 000 was intended to cover
losses from 1997 and to provide the company with
liquidity.

(34)

In order to safeguard the company’s ability to pay, a
credit line of DEM 4 000 000 was made available.

2.3.2 Financial commitments

prospects

anticipated

(27) A distribution network for sales of components was
supposed to be set up and a new marketing concept in
the field of services established in order to exploit the
favourable
fields.
Moreover, SHB intended to boost productivity by taking
several
internal measures. A new company structure
should lead to increased transparency. A restructuring of
should strengthen the
the purchasing department
it could obtain
position of
discounts
The
reorganisation of internal auditing and control should
enhance planning certainty.

the company so that

favourable

payment

terms.

these

and

in

(28)

The costs of restructuring the company amounted to an
estimated DEM 3 827 000
line
(Avalrahmen) of DEM 4 000 000. The breakdown was as
follows:

credit

plus

a

Restructuring measures

Amount

Exchange of shareholders

1 110 000

(in DEM)

Investment

(cid:151) buildings

(cid:151) reorganisation of equipment and

machinery

Loss cover 1997/liquidity

860 000

997 000

860 000

Total

3 827 000

Credit line (Avalrahmen)

4 000 000

(35)

Financing for the restructuring measures was to come
from the following sources:

Total

7 827 000

(in DEM)

(29)

In order to stabilise the pattern of ownership, two new
investors acquired the shares of two former shareholders
for a price of DEM 585 000 as part of a management
buy-out. The third investor already owning shares in the
company acquired the shares held by SHB for DEM
525 000. The exchange of shareholders took place in
July/August 1997. The costs of the exchange amounted
to DEM 1 110 000. The company is now owned by
three natural persons who are part of the management
and do not hold shares in other companies.

(30) An amount of DEM 860 000 was needed to finance
part of the construction of an administrative building.
The total cost of this new building amounted to DEM
the
1 810 000. The building was needed because

Financial measures

Amount

Own resources

Two loans from the Equity Loan Scheme

Loan from the Equity Fund for Eastern
Germany

216 000

228 000

900 000

Direct investment grants (joint scheme)

557 000

Two loans from the Consolidation Fund

1 926 000

Credit line

Total

3 827 000

4 000 000

(cid:151) guarantee covering 80 % of credit line

3 200 000

(cid:151) non-guaranteed part of credit line

800 000

Total

7 827 000

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(36) An amount of DEM 216 000 was financed out of own

resources.

Individual notification of
Consolidation Fund is therefore necessary.

the two loans

from the

(37)

Two loans amounting to DEM 228 000 were granted
under the Equity Loan Scheme Eigenkapitalhilfeprogramm.
the
A loan of DEM 900 000 was
Reconstruction
f(cid:252)r
Wiederaufbau from the Equity Fund for Eastern Germany
Beteiligungsfonds Ost.

granted by
Loan Corporation Kreditanstalt

(38)

The company received investment grants totalling DEM
557 000 from the Land of Thuringia.

(39) A credit line of DEM 4 000 000 was made available to
company by a private bank. The Thuringia
the
Development
80 % deficiency
granted
guarantee (Ausfallb(cid:252)rgschaft) in respect of this credit line
in October 1997.

Bank

an

(40)

Two loans of DEM 1 575 000 net
(DEM 1 615 000
gross) and DEM 351 000 were granted to the company
by the Thuringia Development Bank from the Thuringia
Consolidation Fund in April 1998.

(41) Germany had notified the

two loans

from the
Consolidation Fund by letter dated 10 July 1998. This
aid scheme requires individual notification of aid to the
Commission if any rescue and restructuring aid in
excess of EUR 1 000 000 has already been granted to
the two
the company. The individual notification of
loans was justified on the grounds that the guarantee of
the Thuringia Development Bank covering 80 % of the
credit line of DEM 4 000 000 had been granted to the
company when it was already in difficulty.

(42) However, by letter dated 13 July 1999, Germany
withdrew the notification. It claimed that the deficiency
not
in October
guarantee
restructuring aid because the company had not been in
difficulty at the time.

1997 was

granted

(43) Germany asserted that SHB ran into difficulties only at
the end of 1997 and the beginning of 1998. At the
time that
the guarantee was granted, SHB was a
company with no liquidity problems and able to meet
its payment obligations.

(44)

faced

The Commission cannot accept this view. The firm’s
annual report for 1997 States that the opening of the
bankruptcy proceedings in respect of BAKRA on 4
March 1997 caused liquidity problems for the Gresse
Gruppe as well as for SHB. According to this report, the
company
the
cancellation of credit insurance by suppliers, a loss of
confidence on the part of buyers and a freezing of
credit
first
restructuring plan dating from May 1997. According to
the Commission, SHB therefore already had liquidity
problems at the time that the guarantee was granted
and has to be regarded as a company in difficulty.

also mentioned in the

lines. This

difficulties

financial

due

to

is

2.4. Market analysis

(45)

(46)

for mechanical

SHB is active in the field of crane technology and
components
for
transport storage and transmission systems. In addition,
including the
it provides
supply of replacement parts. It operates in the market
for special cranes. This market is worldwide and thus
extends across Member States.

related customer

engineering

services,

and

is

crane market

The general
fiercely competitive.
According to information from the Federal Statistical
Office, the turnover in the German market for lifting
and conveyance systems increased significantly from
DEM 20 500 million in 1998 to DEM 21 900 million in
i.e. by around 6,83 %. There are grounds for
1999,
believing that
there may be excess capacity in the
sector (13).

(47) No precise data are available for the niche market in
special cranes. However, according to the information
available to the Commission, there is no indication of
any excess capacity in the market.

3. OPENING OF THE PROCEDURE

(48)

formal

The Commission initiated the
investigation
procedure in respect of
two loans granted by the
the Thuringia
Thuringia Development Bank out of
Consolidation Fund, an aid scheme for companies in
difficulty approved by the Commission. In order for the
loans to be covered by this scheme, under which they
had allegedly been granted,
the
Community guidelines for rescuing and restructuring
in difficulty (1994 guidelines) (14) must be
firms
fulfilled. When opening the procedure, the Commission
had doubts that these conditions had been satisfied: no
there
detailed restructuring plan had been submitted,
was no indication that the financial forecasts would be
met and the investor contribution could not be regarded
as being significant.

the conditions of

(49)

In addition, Germany claimed that a number of
measures had been granted under
approved aid
schemes. On the basis of
the information available,
however,
the Commission was unable to ascertain
whether the loans of DEM 228 000 under the Equity
Loan Scheme and DEM 900 000 under the Equity Fund
for Eastern Germany were covered by the relevant
schemes, under which they had allegedly been granted.
No information had been provided either on the terms

(13) See page 57,

(cid:145)Statistisches Handbuch f(cid:252)r den Maschinenbau(cid:146), 1997
edition, prepared by the Verband Deutscher Maschinen- und
Anlagenbau e.V.

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

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of the loans or on the exact identity of the schemes.
The Commission issued an information injunction to
determine whether
these loans complied with the
schemes under which they had allegedly been granted.

(54)

The scheme provides loans to individuals starting up or
In the case of a
consolidating a business activity.
company in difficulty,
in the
1994 guidelines (16) have to be met.

the conditions set out

4. COMMENTS FROM GERMANY

(55)

(50)

In its reply to the decision to open the procedure,
Germany claimed that the condition for restoring the
viability of
the company was met. Although the
turnover forecasts laid down in the restructuring plan
would not be fully met, the results in 1998 and 1999
were better
In addition,
than originally envisaged.
Germany submitted a detailed restructuring plan.

(51) Germany restated its view that the company was not in
difficulty in October 1997, when the 80 % deficiency
guarantee for a credit line was granted. It thus claimed
that notification of the two loans from the Thuringia
Consolidation Fund was not necessary.

The loans were granted in 1998 to two individuals to
enable them to acquire shares in the context of a
management buy-out. As the company was in difficulty
at the time the aid was granted, the conditions set out
in the aforementioned guidelines have to be met. As
pointed out below, these conditions are met. The other
conditions laid down in the scheme are also met. The
loans are thus covered by the aid scheme under which
they were allegedly granted and therefore constitute
existing aid, which does not need to be re-assessed in
the present procedure. However, they will be taken into
account in calculating the proportionality of the aid.

5.2.2. Loans from the Equity Fund for Eastern Germany

(Beteiligungsfonds Ost)

5. ASSESSMENT OF THE AID

5.1. Aid within the meaning of Article 87(1) of the
EC Treaty

(52)

SHB has received financial assistance deriving from
public resources which a company in difficulty would
not have received from a private investor, conferring on
it advantages vis-(cid:224)-vis its competitors. As the relevant
product market
is worldwide, such assistance affects
trade between Member States. These financial measures
thus constitute State aid within the meaning of Article
87(1) of the EC Treaty and the Commission must assess
their compatibility with the common market.

(56) A loan of DEM 900 000 was

granted by

the
Reconstruction Loan Corporation (KfW) from the Equity
Fund for Eastern Germany, an aid scheme authorised by
the Commission (17). As
the Commission did not
possess enough information to assess whether the loan
is covered by the relevant aid scheme,
issued an
information injunction.

it

(57)

The scheme provides loans for strengthening the equity
capital base of companies in the new L(cid:228)nder. In the case
of a company in difficulty, the conditions set out in the
1994 guidelines have to be met.

5.2. Compliance with existing aid schemes

(58)

The loan was granted to a shareholder of the company
in December 1997. An amount of DEM 315 000 was
used to purchase additional shares, while the remaining
DEM 585 000 was injected into the company as capital.

5.2.1. Loans from the Equity Loan Scheme
(Eigenkapitalhilfeprogramm)

(53)

Two loans of DEM 160 000 and DEM 68 000 were
allegedly granted under the Equity Loan Scheme, an aid
scheme approved by the Commission (15). As
the
Commission did not possess enough information to
assess whether these loans are covered by that aid
scheme, it issued an information injunction.

the conditions

(59) As the company was in difficulty at the time the aid
was granted,
in the 1994
guidelines have to be met. As pointed out below, these
conditions are met. The loan also meets the other
conditions set out in the programme. It is thus covered
by the aid scheme under which it was allegedly granted.

set out

(15) N 519/95, SG (95) D/11491 of 14.9.1995.

(16) See footnote 14.
(17) N 646/A/95, SG(95) D/12827 of 18.10.1995.

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It therefore constitutes existing aid, which does not need
to be re-assessed in the present procedure. However, it
will
the
account
taken
proportionality of the aid.

calculating

into

be

in

5.2.3. Investment grants

(60)

joint

scheme

Federal Government/L(cid:228)nder

Investment grants amounting to DEM 557 000 were
granted to the company under the 26th outline plan for
the
for
improving regional economic structures, a regional aid
scheme approved by the Commission (18). The grants
comply with the conditions set out in the scheme under
which they have been allegedly granted and are
therefore covered by the scheme. They thus constitute
existing aid, which does not need to be reassessed.
However, they will be taken into account in calculating
the proportionality of the aid.

5.2.4. 80 % guarantee from the Thuringia Development

Bank (Th(cid:252)ringer Aufbaubank)

(61) A guarantee covering 80 % of a credit

an

that,

under

scheme

approved

line of DEM
4 000 000 was granted by the Thuringia Development
the
Bank
aid
by
Commission (19). The scheme stipulates
the
if
guarantee is granted to a company in difficulty,
the
conditions set out in the 1994 guidelines have to be
met. As pointed out below, these conditions are met. As
the other conditions laid down in the scheme are also
met, the guarantee is covered by the aid scheme, under
which it was allegedly granted. It therefore constitutes
existing aid, which does not need to be re-assessed.
However, it will be taken into account in calculating the
proportionality of the aid.

(63)

(64)

in difficulty. The conditions of

The aid scheme provides for measures for restructuring
the aid
companies
scheme are the same as those set out
in the 1994
guidelines. The Commission had doubts as to whether
these conditions were met and initiated the formal
investigation procedure.

The first loan was for DEM 1 615 000 gross, which
amounts to DEM 1 575 000 net. A handling fee of DEM
40 000 was deducted from the loan, DEM 578 000 was
used to provide the company with liquidity and DEM
997 000 was
and
investments
equipment.

in machinery

for

(65)

The second loan was for DEM 315 000. The company
used it to help two individuals acquire shares in the
context of a management buy-out. This measure is part
of the financial restructuring of the company and will
strengthen its capital base.

(66)

In order for the two loans to be covered by the scheme,
under which they were allegedly granted, the conditions
of the 1994 guidelines have to be met.

5.3. Compliance with the 1994 guidelines

(67)

Since, according to the information available, the aid
the 1994
was
guidelines (21) are applicable (22).

before 30 April 2000,

granted

5.2.5. Loans from the Thuringia Consolidation Fund

(Th(cid:252)ringer Konsolidierungsfonds)

(62)

Two loans of DEM 1 615 000 gross (DEM 1 575 000
net) and DEM 351 000 were granted to the company
under the Thuringia Consolidation Fund, an aid scheme
for companies in difficulty approved by the Commission
in April 1998 (20).

(18) 26. Rahmenplan der Gemeinschaftsaufgabe zur Verbesserung der
regionalen Wirtschaftsstruktur: Measures under this scheme qualify
as regional investment aid under Article 87(1) of the EC Treaty
and were approved by the Commission on the basis of
the
derogation in Article 87(3)(a) of the EC Treaty (N 123/97, SG (97)
D/7104 of 18.8.1997).

(19) B(cid:252)rgschaftsrichtlinie der Th(cid:252)ringer Aufbaubank (N 117/96, SG

(96) D/11696 of 27.12.1996).

(20) Th(cid:252)ringer

Konsolidierungsfonds

f(cid:252)r

Unternehmen

in

Schwierigkeiten (NN 74/95, SG (96) D/1946 of 6.2.1996).

R e s t o r a t i o n o f l o n g - t e r m v i a b i l i t y

(68)

The granting of restructuring aid requires a realistic,
coherent and far-reaching restructuring plan capable of
restoring the long-term viability of the firm within a
reasonable timescale and on the basis of
realistic
assumptions.

(21) See footnote 14.
(22) Section 7.5 of the 1999 Guidelines on State aid for rescuing and
restructuring firms in difficulty states that (cid:145)the Commission will
examine the compatibility with the common market of any
rescuing and restructuring aid granted without its authorisation
((cid:133)) on the basis of the Guidelines in force at the time the aid is
granted ((cid:133))(cid:146) (OJ C 288, 9.10.1999).

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(69) Germany submitted two restructuring plans dated May
1997 and March 1998. As explained in Section 2.3.1,
these two plans taken together constitute a coherent
restructuring plan capable of restoring the company’s
viability. The restructuring was to last two years, this
being a reasonable timescale.

company, the fact that the aid is granted in an assisted
area under Article 87(3)(a) of the EC Treaty and the
company’s
status as an SME must be taken into
consideration.

(70)

The latest financial data confirm this assessment:

(in DEM)

1998

1999

2000 (*)

(76) According

to

the

the
information
Commission, there is no excess of capacity in the niche
market
in which SHB is active.
Moreover, SHB is not expanding its capacity.

for special cranes,

available

to

Turnover

26 664 000 29 974 000 29 467 000

Profit

331 000

1 444 000

269 000

(77) According to the information submitted by Germany,
the company accounted for 2 % of total output on the
European market for special cranes.

(*) Provisional.

(71)

to

extraordinary

income. However,

The strong increase in profits in 1999 is attributable
an
mainly
examination of the data provided by Germany shows
that SHB was able to reduce its losses significantly and
to resolve the problems facing it. The figures show a
turnover
continuing positive development. Provisional
in 2000 is only just short of
the turnover of DEM
30 040 000 aimed at in the restructuring plan.

(78)

Since SHB is an SME situated in an assisted area
pursuant to Article 87(3)(a) of the EC Treaty and since
its production is limited, the Commission comes to the
is no undue distortion of
conclusion that
competition and competitors are not adversely affected.

there

A i d i n p r o p o r t i o n t o t h e r e s t r u c t u r i n g
c o s t s a n d b e n e f i t s

(72)

In view of this development and the qualitative aspects
of the restructuring, the Commission concludes that the
condition of restoring viability is met.

(79)

A v o i d a n c e o f u n d u e d i s t o r t i o n s o f
c o m p e t i t i o n

investors must make

The amount and intensity of the aid must be limited to
the strict minimum needed to enable restructuring to be
undertaken and must be
related to the benefits
anticipated from the Community’s viewpoint. Therefore,
the
contribution to the
restructuring plan from their own resources. Moreover,
the form in which the aid is granted must be such as to
avoid providing the company with surplus cash which
would be used for aggressive, market-distorting activities
not linked to the restructuring process.

a

(73)

as

far

for
The restructuring plan must contain measures
effects on
as possible
offsetting
competitors. Otherwise, the aid granted in support of
the restructuring would be contrary to the common
interest and ineligible for exemption pursuant to Article
87(3) of the EC Treaty.

adverse

(74) Where, therefore, an assessment of demand and supply
shows that there is a structural excess of production
capacity
the
restructuring
contribution,
proportionate to the aid received, to the restructuring of
the relevant sector by irreversibly reducing or closing
capacity.

relevant market
plan must make

in the EU,

in a

a

(75)

To assess the consequences of maintaining SHB in the
market and the effect on competitors, the output of the

(80)

The costs of restructuring SHB totalled DEM 7 827 000.

(81) Of this amount, DEM 216 000 was brought in directly
by the investors and can be regarded as a private
investor contribution.

(82) Germany claims that the loans granted under the Equity
Loan Scheme are to be regarded as a private investor
contribution. However,
it has to be noted that, even
though the loans are provided by a private bank, they
are refinanced by a public bank (Deutsche Ausgleichsbank)
under an approved aid scheme. The scheme provides
low-interest loans to individuals wishing to acquire the
shares of a company. Aid is granted in form of a
subsidised interest rate.

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(83)

The 1994 guidelines state that aid beneficiaries will
normally be expected to make a significant contribution
to the restructuring plan from their own resources or
from external commercial financing.

account of the securities provided. This part of the loan
amounting to DEM 450 000 can therefore be regarded
as being financed under market conditions and can be
taken into account in calculating the private investor
contribution.

(84)

The two loans of DEM 160 000 and DEM 68 000 were
granted in January 1998 for a period of 20 years. The
loans are to be paid back in equal instalments between
2008 and 2017. The interest rate on the loans is 7 %.
However, part of the interest is paid by the Deutsche
Ausgleichsbank
Fund
(ERP-Sonderverm(cid:246)gen). The interest rate to be paid by
the investors is thus reduced as follows: 0 % in 1998
and 1999, 3 % in 2000, 4 % in 2001 and 5 % from
2002 to 2017. The risk is covered by the private bank.

from the

Special

ERP

(85) As the interest rate is subsidised by the State, market
conditions are not present. The reference interest rate at
the time the loans were granted was 5,94 %. Since the
company was in difficulty, it is assumed that no bank
would have granted an equivalent loan under market
conditions at this interest rate but would have charged a
premium on the interest rate in order to take into
account of the increased risk. The interest rate at which
the loans were granted to the investors is therefore well
below the interest rate which the investors would have
had to pay
conditions.
Consequently, the Commission considers that the two
loans cannot be regarded as external
financing and
cannot be taken into account in calculating the private
investor contribution.

loans under market

for

(86)

is not

In addition, Germany considers that the loan of DEM
900 000 granted under the Equity Fund for Eastern
Germany, an approved aid scheme,
to be
regarded as a private investor contribution. The loan is
provided by a private bank but
refinanced by the
Reconstruction Loan Corporation, a public bank. It was
granted in December 1997 for a period of 10 years at
an interest rate of 6,65 %. It is to be paid back in one
instalment
the
private bank is liable for 50 % of the loan,
i.e. DEM
the loan provided the
450 000. The recipient of
following securities: a personal guarantee, transfer of his
rights as a shareholder of the company and a deposit of
DEM 450 000 at the private bank.

in 2007. The contract stipulates that

(88) A credit line of DEM 4 000 000 was made available to
the company by a private bank. Of this credit line, 80 %
is covered by the State’s deficiency guarantee. The bank
bears the risk of the remaining 20 %. The company
land
offers a second mortgage on the company’s
amounting to DEM 4 000 000 as collateral
for the
credit line. The 20 % of the credit line not covered by a
guarantee, i.e. DEM 800 000, can therefore be regarded
as financing under market conditions and can be taken
into consideration in calculating the private investor
contribution.

(89)

In total, the private investor contribution amounts to
DEM 1 466 000. This represents 18,7 % of
the total
restructuring costs of DEM 7 827 000. In view of the
company’s status as an SME and the problems SMEs
have in finding financing, the investor contribution to
the restructuring can be regarded as significant within
the meaning of the 1994 guidelines.

F u l l i m p l e m e n t a t i o n o f t h e r e s t r u c t u r i n g
p l a n

(90)

(91)

The Commission notes that the restructuring plan has
to be fully implemented. It requests Germany to submit
annual
the
restructuring.

the period

covered

reports

for

by

6. CONCLUSION

The Commission finds that
the Federal Republic of
Germany has unlawfully implemented aid measures
amounting to DEM 1 966 000 in breach of Article
these measures,
88(3) of
although unlawfully implemented, meet the criteria laid
therefore
down in the 1994 guidelines
compatible with the common market pursuant
to
Article 87(3)(c),

the EC Treaty. However,

and are

(87)

The part of the loan for which the private bank is liable
is secured by a deposit of DEM 450 000. Moreover, the
reference interest rate at the time the loan was granted
was 5,54 %, so that the loan was granted at an interest
rate above the reference interest rate. Although the
company is in difficulty, no premium has been charged
risk on
since the private bank bears no additional

HAS ADOPTED THIS DECISION:

Article 1

The State aid which Germany has implemented for Saalfelder
Hebezeugbau, amounting to DEM 1 966 000,
is compatible
with the common market within the meaning of Article 87(1)
of the EC Treaty.

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Article 2

Done at Brussels, 18 July 2001.

Germany is hereby requested to submit by the end of 2001
annual reports covering the years 1998 to 2000.

Article 3

This Decision is addressed to the Federal Republic of Germany.

For the Commission

Mario MONTI

Member of the Commission