The Commission OK’s Brodosplit Shipyard Restructuring Plan

The European Commission has authorised, an amendment to the restructuring plan and the privatisation contract for Brodosplit, one of the Croat shipyards in difficulty. The amendment concerns a modest increase in the total amount of restructuring aid to Brodosplit, as well as additional compensatory measures.

Croatia committed to sign the privatisation contract by 28 February 2013.

Commission Vice-President and Competition Commissioner Joaquin Almunia said: “I am happy that we could find a satisfactory solution for the restructuring of the Brodosplit yard. This means that privatisation can now go ahead in line with the commitments made by Croatia under the Act of Accession. The implementation of the restructuring plan should enable the new owners of Brodosplit and its workforce to move ahead and build a new future for this shipyard”.

In line with EU guidelines on state aid for the rescue and restructuring of companies, any restructuring aid must be accompanied by compensatory measures in order to offset the impact of the aid on competition. The Commission has accepted the proposal by Croatia to further reduce the annual production ceilings for the yard. The Commission considers that these additional compensatory measures are sufficient in view of the relatively modest increase in the amount of restructuring aid requested for the yard.

Moreover, the own contribution of the Brodosplit Group’s buyer to the restructuring is real, free of state aid and still represents 40% of the total restructuring costs. In addition, Croatia committed to sign the privatisation contract by 28 February 2013, allowing for completion of the privatisation process for Brodosplit by 1 July 2013, i.e. the date of accession of Croatia to the European Union.

Background

The Act of Accession provides that Croatia should carry out the restructuring of its shipyards in difficulty through their privatisation on the basis of a competitive tendering process by the date of accession, 1 July 2013.

In the case of the Brodosplit shipyard, the bidder chosen after the competitive tendering process was the undertaking DIV. The restructuring plan submitted by DIV was accepted by both the Croatian Competition Authority and the Commission in February 2011. A first amendment to the restructuring plan was accepted by the Commission on 16 August 2012. On 31 January 2013, Croatia submitted a second amendment to the restructuring plan and the privatisation contract for the Brodosplit Group approved by the Commission on 16 August 2012.

Croatia notified a second amendment in January 2013. This amendment concerns a modest increase in the total costs for the restructuring of Brodosplit, and a proportional increase in the total amount of restructuring aid.

[mappress]

Press Release, February 20, 2013