European Commission launches investigation of Belgian glass producer Ducatt
Thursday, 19 May 2016
The company is suspected of having received illegal financial support. The European Commission announced today (19 May) that it has opened an in-depth probe to assess whether financial support of in total over €40 million granted by the publicly-owned Flemish investment companies LRM and PMV in favour of Ducatt NV was in line with EU state aid rules.
Ducatt NV is a Belgian manufacturer of glass for solar panels located in Limburg. It employs around 110 people.
In November 2014 the Commission received a complaint from a competitor alleging that Ducatt NV had been granted illegal financial support by two publicly-owned shareholders, Limburgse Reconversie Maatschappij(LRM) and Participatie Maatschappij Vlaanderen NV (PMV).
Between 2012 and 2014 LRM and PMV invested in Ducatt, which has been loss making since its creation in 2010, and provided numerous capital increases and shareholder loans, parts of which were later converted into equity.
In 2015 a recapitalisation led to the exit of all existing shareholders except LRM and to the entry of new shareholders. This was accompanied with the restructuring of existing shareholder loans, which were partially written off.
Together, these measures amount to over €40 million in financial support by LRM and PMV.
State interventions in companies can be considered free of state aid within the meaning of the EU rules when they are carried out at conditions that a private investor operating at market conditions would have accepted.
The Commission takes the preliminary view that no private investor would have accepted to act in the same way as LRM and PMV, who not only invested heavily in a company, which has been loss making over five years, but also accepted to convert some loans into equity and to write off others.