SHIPPING: COURT RAPS COMMISSION KNUCKLES OVER CORSICA FERRY AID.
SNCM's main rival, the privately-owned Corsica Ferries, disagreed with the Commission's decision, saying that the French authorities and SNCM had failed to provide accurate information about the reasons for granting the aid. In particular, Corsica Ferries argued that the obligation for state aid to be kept to a minimum had been ignored.
According to Corsica Ferries' complaint, the Commission had not taken into account the net proceeds of the sales of real property assets provided for in the SNCM restructuring plan and carried out in 2003 in determining the minimal nature of the aid granted to SNCM. The Court agreed, confirming that the Commission had underestimated the proceeds of the asset sale by euro 12 million.
Under European Union guidelines, the amount of state aid granted to companies in difficulty must be limited to the strict minimum needed to enable restructuring to be undertaken in the light of the existing financial resources of the company. By failing to take into account the euro 12 million proceeds from the sale of property, the Commission had underestimated the amount of cash available to the company, and therefore allowed aid to be granted at a higher level than was justified.
In its defence, SNCM had argued that the euro 12 million had done little to improve the financial situation of the company, but the Court said that this could not justify not taking them into account.
The Court also criticised the Commission for not taking more care in assessing the proceeds of the sale of SNCM's assets. The Commission, it said, had made an approximate estimate of the value in its decision, even though at the time it must have known the actual amount. This "manifest error of assessment" in underestimating the value of the proceeds was reason enough to uphold Corsica Ferries' complaint, the Court concluded.
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|Title Annotation:||Corsica Ferries; SNCM|
|Article Type:||Brief Article|
|Date:||Jun 18, 2005|
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