(15) This measure was never notified to the Commission; instead Greece specified in the notification of the rescue aid of 5 November 2007 that the company had not received rescue or restructuring aid before.
(16) This measure was based on a non-notified guarantee scheme, approved by the Greek Ministry of Finance on 26 January 2007. The scheme granted State guarantees for the rescheduling of loans outstanding on 31 December 2006, whether or not overdue, into a new loan. The relevant loans were granted to industrial, mining, livestock farming and hotel companies established and operating in the district of Imathia, Northern Greece, for investments in fixed assets and working capital. The scheme did not provide for a premium for the State guarantee. On the basis of one of its provisions, the guarantee eventually covered a maximum amount of EUR 30 million plus interest, therefore an amount higher than that of the underlying loans (EUR 22,7 million)(6).
2.2.3.
Measure 2: The notified State guarantee of 2008
(17) On 16 July 2008 the Commission approved a notified rescue aid for Varvaressos, in the form of a State guarantee for a EUR 2,4 million loan(7). The decision was adopted based on the information that the company had not been granted rescue or restructuring aid before(8), and was therefore eligible for rescue aid.
(18) The guarantee was granted without a premium for the guarantor (the State) and covered the entire amount of the loan, i.e. EUR 2,4 million.
(19) According to the notification of the measure by the Greek authorities on 5 November 2007, from the total amount of the aid, EUR [1-2] million would finance the following investments: (a) the reorganisation and modernisation of the company’s management (EUR […] million), carried out over the period 2006-2009; and (b) the re-direction of production to more profitable products (EUR […] million), carried out over the period 2007-2009. Those investments were also part of the restructuring plan submitted on 15 January 2009 and were to be carried out over the same period of time as the plan (see recitals 22-23 and 42-43 below).
2.2.4.
Measure 3: The notified direct grant of 2009
(20) On 15 January 2009, Greece notified a direct grant of EUR 14 million to finance the company’s restructuring plan.
(21) According to the submitted restructuring plan, the company’s difficulties were caused by the high financial cost of an investment programme carried out in 2000-2005, high operating costs and managerial shortcomings.
(22) The plan stretches over the period 2006-2011. It has been properly updated and adjusted in the course of the formal investigation procedure. The core idea of the restructuring process envisages full payment of most of the company’s bank loans (including the one for which rescue aid was approved in July 2008), a reduction in production and employment(9), the re-direction of production to more profitable products (the proportion of special yarn production in total production to be increased to […] % by 2012) and the reorganisation and modernisation of the company’s management.
(23) Under the restructuring plan’s three scenarios (intermediate, best-case and worst-case), the company will restore its long-term viability by the end of 2011.
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