2003/591/EC: Commission Decision of 30 April 2003 on the State aid implemented by Germany for Heckert Werkzeugmaschinen GmbH (Text with EEA relevance) (notified under document number C(2003) 1326)
Date: 2003-04-30
Institutions: European Commission
Subjects: Germany, State aid, aid for restructuring, control of State aid, machine tool

L 199/36

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Official Journal of the European Union

7.8.2003

COMMISSION DECISION

of 30 April 2003

on the State aid implemented by Germany for Heckert Werkzeugmaschinen GmbH

(notified under document number C(2003) 1326)

(Only the German text is authentic)

(Text with EEA relevance)

(2003/591/EC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

(a) Privatisation

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) and having regard to
their comments,

Whereas:

(1)

(2)

(3)

I. PROCEDURE

By letter dated 28 December 1999, Germany notified
the Commission of aid to Heckert Werkzeugmaschinen
GmbH. The aid case was registered under number NN 7/
2000. By letters dated 21 January 2000, 26 January
2001 and 1 August 2001, the Commission asked for
further information. Germany replied by letters dated 24
February 2000, 29 May 2001 and 6 September 2001.

By letter dated 28 December 2001, 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 and invited interested parties to submit
their comments (2). The case was then registered as C
93/2001. Comments from Germany were received on
28 January and 1 March 2002.

II. DESCRIPTION

1. Beneficiary

rescue and restructuring aid to
The case concerns
Heckert Werkzeugmaschinen GmbH. The
company
produces machine tools and is specialised in the produc-
tion of milling machines. It is situated in Chemnitz in
the Land of Saxony, an assisted area under Article
87(3)(a) of the EC Treaty. HWG is the successor of the
former State-owned ‘Kombinat Fritz Heckert’.

(4)

(5)

(6)

(7)

(8)

In 1991 the ‘Kombinat Fritz Heckert’ was taken over by
the German Treuhandanstalt (‘THA’) and was renamed
Heckert-Chemnitzer Werkzeugmaschinen GmbH (‘H-
CW’).

After an open and unconditional tender, the essential
parts of the machine tool production were sold on 24
September 1993 under the name of Heckert Chemnitzer
Werkzeugmaschinen GmbH (‘HCW’)
to Traub AG,
Reichenbach. The purchase price was DEM 7 million
(EUR 3,57 million). At that time HCW employed 420
people.

In the context of the privatisation, the company received
aid totalling some EUR 81,6 million under approved aid
schemes. These measures included residual securities for
liquidity guarantees and credit line liabilities amounting
to DEM 11 million (EUR 5,6 million) originally granted
by the Bundesanstalt für vereinigungsbedingte Sonder-
aufgaben (‘BvS’) before the privatisation. These guaran-
tees were taken over, up to a liability of 80 %, by the
Land of Saxony (‘Land’) and the Federal Government (3).

In 1995 Traub AG began to encounter financial difficul-
ties. Due to the bad results incurred by Traub AG, the
banks froze the whole group's credit lines. By the end of
1996, the subsequent lack of liquidity forced both Traub
AG and HCW into bankruptcy. At the time of its bank-
ruptcy HCW employed 640 people.

(b) Continuation of activity during receivership

The bankruptcy receiver decided to continue the activity
of HCW in order to prepare it for subsequent sale. On
24 January 1997, he established Heckert Werkzeug-
maschinen GmbH (‘HWG’) as a hive-off of HCW. This
was done in order to be able to act on the market with a
company that was not in receivership. HWG's purpose
was to acquire and process new orders whereas HCW,
which was in receivership, continued to produce the
goods that were to be sold via HWG.

(1) OJ C 51, 26.2.2002, p. 13.
(2) See footnote 1.

(3) Bundesbürgschaftsprogramm (Ost)

(SG (91) D/13344, 15.7.1991

(N 297/91)).

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(9)

On 29 November 1996, the Deutsche Bank granted a
credit totalling DEM 16 million (EUR 8.16 million) to
the company in receivership. Later, on 13 June 1997,
the credit was increased by DEM 12 million (EUR 6,12
million) in order to secure the processing of one of the
main orders. The credit was granted at an interest rate of
7,5 % p.a. and was to be reimbursed on 15 February
1998. The credit was publicly guaranteed up to 80 % by
the Federal Government and the Land. The provision for
the guarantee amounted to 0,5 % and the guarantee
expired the same day that the loan was to be reim-
bursed.

(10) On 7 August 1997, the company also received a loan of
from BvS at an

DEM 9,5 million (EUR 4,9 million)
interest rate of 6 %.

(11)

Both measures were granted to cover the operating costs
during the receivership.

(c) Sale of the company to a new investor

(12) On 16 June 1998, the receiver sold HWG as well as the
necessary production assets of HCW to the Swiss
machine-tool producer Starrag AG (‘Starrag’). The
DEM 50 000
purchase
(EUR 25 510). The price paid for
the assets was
DEM 47,4 million (EUR 24,2 million).

HWG was

price

for

(13)

In the context of the sale to Starrag, BvS waived the
reimbursement of the abovementioned loan of DEM 9,5
million (EUR 4,9 million). However, Germany informed
the Commission on 10 May 2001 that the receiver had
fully reimbursed the loan including interest.

(14) On 19 September 1998, the Deutsche Bank granted a
loan of DEM 10 million (EUR 5,1 million) to HWG that
was publicly refinanced by the Kreditanstalt für Wieder-
aufbau (‘KfW’) under an aid scheme approved by the
Commission (1). The loan was granted for a period of 10
years at an interest rate of 3,75 % and is to be reim-
bursed in 16 instalments starting at the end of February
2001.

(15)

Lastly, HWG also received investment
grants of
DEM 13,28 million (EUR 6,78 million) as well as an
investment premium of DEM 499 800 (EUR 255 000)
under aid schemes approved by the Commission (2).

difficulty (3) (‘the guidelines’). Since the aid was granted
before the entry into force of the new guidelines in
1999 (4). it was assessed under the old 1994 guidelines.

(17) When it

initiated the Article 88(2) procedure,

the

Commission expressed the following doubts:

(a) whether

the

guarantees

of DEM 11 million
(EUR 5,6 million) for liquidity credits and credit line
liabilities granted in the context of the privatisation
complied with the conditions of the scheme referred
to. In particular it was doubtful whether the guaran-
tees could be granted jointly by the Federal Govern-
the measures
ment and the Land and whether
consisted of partial and temporary guarantees as
required by the scheme;

(b) whether

the public 80 % guarantee granted in
connection with the increase of the Deutsche Bank
loan of DEM 16 million (EUR 8,16 million)
to
DEM 28 million (EUR 14,3 million) and deemed to
be rescue aid in the initiation of proceedings
complied with the criteria set out in the guidelines;

(c) whether the KfW refinancing of the Deutsche Bank
loan of DEM 10 million (EUR 5,1 million), in parti-
cular its interest rate of 3,75 % and its repayment
schedule of initially two and a half repayment-free
years, was in line with the abovementioned scheme;

(d) whether the BvS loan of DEM 9,5 million (EUR 4,9
million), which in the initiation of proceedings was
deemed to be rescue aid, could be considered to be
part of a one-off rescue operation and whether it
complied with the
repayment
time
provided for in the guidelines.

limits

for

(18) As regards Germany's claim that
aid,
as

the measures were
compatible
the Commission
expressed doubts whether the beneficiary was eligible for
restructuring aid under the terms of the guidelines.

restructuring

III. COMMENTS FROM GERMANY

(19) During the formal

investigation procedure Germany
supplied the following additional or revised information:

2. Decision to initiate proceedings under Article

88(2) of the EC Treaty

1. Guarantees granted in the
privatisation

context of

the

(16)

In the decision to initiate the formal investigation proce-
dure, the aid was assessed according to the guidelines on
in
State aid for

rescuing and restructuring firms

(1) KfW-Mittelstandsprogramm (SG (96) D/3473, 29.3.1996 (NN 37/

95)).

(2) 27. Rahmenplan der Gemeinschaftsaufgabe ‘Verbesserung der regio-
(SG (1999) 03472,

nalen Wirtschaftsstruktur’ (investment grants)
17.5.1999 (C 84/98)).
Investitionszulagengesetz 1996 (investment premium)
3794, 11 April 1996 (N 494/A/95)).

(20) Germany informed the Commission that the guarantees
on the loans of DEM 11 million (EUR 5,6 million)
made available in the context of the privatisation were
granted on 21 February 1995 as 65 %, and not 80 %,
deficiency guarantees and were limited in time to 31
December 2002. As of 31 December 1999 the guaran-
tees gradually decreased by 25 % each year.

(SG (96)

(3) OJ C 368, 23.12.1994, p. 12.
(4) OJ C 288, 9.10.1999, p. 2.

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(21)

The repartition of the guarantee liability between the
Federal Government and the Land of 60:40 was stated to
be an internal measure which had no influence on the
scheme's total aid ceiling, of which the Commission had
been informed by letter dated 26 June 1995.

of Saxony in the context of the privatisation, it is noted
that the scheme referred to allows for guarantees of up
to 80 % for investment credits and temporary working
capital loans.

2. The 80 % guarantee during the receivership

(28)

(22) With respect to this measure, Germany pointed out that
it had been granted under the same aid scheme as the
previous measures (1) and therefore should not be
assessed as an ad hoc rescue aid.

3. The KfW refinanced Deutsche Bank loan during

the receivership

(23)

Concerning the refinancing of the Deutsche Bank loan
by KfW, Germany informed the Commission that,
although the loan had to be repaid up to 100 % of its
nominal sum, only 96 % of it was effectively paid out to
the beneficiary. Therefore the loan was granted with an
actual interest rate of 4,58 %.

(24) Germany also emphasised that the loan was refinanced
under the East German component of the scheme (2),
which until the end of 1998 provided for an interest rate
reduced by 0,25 % in comparison to the West German
component. The deviation of the rates used by KfW
from the Commission's reference rate was, according to
Germany, due to the fact that the market rates at that
point were in decline and the reference rate is only
adjusted at long-term intervals.

(25) Germany also pointed out that the East German compo-
nent of the scheme provided for a repayment schedule
commencing after two-and-a-half years.

4. BvS loan during the receivership

(26)

Concerning the compatibility of
the BvS loan of
DEM 9,5 million (EUR 4,9 million) granted during the
receivership, Germany argued that it could be considered
compatible with the conditions of the guidelines for
rescue aid. Germany was of the opinion that in cases
where the recipient of the aid was in receivership, it was
inappropriate to focus on the time of the reimbursement
since in such cases the repayment was made from the
proceeds of the bankruptcy proceedings. This regularly
resulted in delays. Furthermore, Germany underlined
that the grant was used solely to continue the operative
business of HCW during the receivership.

IV. ASSESSMENT

1. Guarantees granted in the
privatisation

context of

the

(27)

Concerning the liquidity guarantee of DEM 5,5 million
and the credit line guarantee of DEM 5,5 million that
were provided by the Federal Government and the Land

The Commission takes account of Germany's comments
according to which the guarantees covered only 65 % of
the credits and were limited in time to 31 December
It is also noted that the internal appointment
2002.
between the Federal Government and the Land, of which
the Commission was informed by letter of 26 June
1995, did not increase the overall aid ceiling or any
other condition of the scheme. These measures therefore
appear to comply with the conditions of the scheme
referred to and do not need to be assessed in this deci-
sion.

2. The 80 % guarantee during the receivership

(29)

In the initiation of proceedings, the public 80 % guar-
antee granted in connection with the increase of the
Deutsche Bank loan of DEM 16 million (EUR 8,16
million)
to DEM 28 million (EUR 14,3 million) was
deemed to be rescue aid and the Commission had doubts
whether the conditions for rescue aid were met.

(30) After the initiation of proceedings, Germany pointed out
that this measure had been granted under the same guar-
antee scheme as the measures above. The Commission
notes that as the measure is a temporary 80 % guarantee
on a temporary working capital loan, it appears to be
covered by the scheme and does not need to be further
assessed in this decision.

3. KfW-refinanced Deutsche Bank loan during the

receivership

(31)

Concerning the KfW refinanced Deutsche Bank loan, the
Commission takes account of Germany's comments
submitted after the initiation of proceedings. According
to these, the loan was granted at an effective rate of
4,58 %. Furthermore, the measure was in fact granted
under the East German component of the scheme which
allowed for a repayment schedule of
two-and-a-half
repayment-free years and an interest rate reduced by
0,25 % in comparison to the West German component
of the scheme. In this context it is also noted that the
loan was granted in a period where the market rates
were in decline and that the Commission's reference rate,
which in September 1998 still amounted to 5,94 %, was
readjusted in November 1998 to 4,87 %.

(1) Bundesbürgschaftsprogramm (Ost)

(N 297/91)).

(SG (91) D/13344, 15.7.1991

(2) KfW Mittelstandsprogramm Ost

(SG (96) D/3475, 29.3.1996

(NN24/96)).

(32)

In the light of this information, the measure appears to
comply with the conditions of the East German compo-
nent of the scheme and does not need to be further
assessed in this decision.

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(33)

(34)

(35)

(36)

In view of the above, all the measures granted in accor-
dance with approved schemes do not need to be further
assessed in this decision.

Consequently, only the BvS loan of DEM 9,5 million
(EUR 4,9 million) that was granted in 1997 is to be
regarded as ad hoc aid.

4. BvS loan granted during the receivership

The Commission notes that the remaining ad hoc aid,
i.e. the BvS loan of DEM 9,5 million (EUR 4,9 million),
has in the meantime been paid back with an interest rate
of 6 %. It is also noted that, at the time when this loan
was granted, the Commission's reference rate, which is
used to establish the interest to be paid in cases of
recovery of incompatible aid, amounted to 5,54 %.

In view of the above, the Commission concludes that the
potentially incompatible State aid, i.e. the BvS loan of
DEM 9,5 million (EUR 4,9 million), has been repaid
and all potential distortions of competition deriving
from the aid have therefore been removed.

V. CONCLUSION

(37)

Consequently, the formal investigation procedure under
Article 88(2) of the EC Treaty in respect of the relevant
measure no longer needs to be pursued,

HAS ADOPTED THIS DECISION:

Article 1

The formal investigation procedure under Article 88(2) of the
EC Treaty initiated on 20 December 2001 in respect of aid
implemented by Germany for Heckert Werkzeugmaschinen
GmbH, Chemnitz, is hereby terminated.

This Decision is addressed to the Federal Republic of Germany.

Article 2

Done at Brussels, 30 April 2003.

For the Commission

Mario MONTI

Member of the Commission