Following an in-depth investigation, the Commission has concluded that an €8.2 million aid to Bison Bial, Poland, is compatible with EC Treaty state aid rules provided that certain conditions are respected. The Commission found that the restructuring plan is sufficient to restore the firm's viability provided that the investment programme announced is fully implemented. However, the Commission considers that, without appropriate safeguards, the aid could lead to undue distortions of competition. The metal tools and fixtures manufacturing sector has excess capacity and the aid might result in shifting the difficulties and the burden of adjustment to more efficient firms and workers operating without aid. To avoid this, Bison Bial must sell, by the end of 2009 one of its production divisions that generates 13% of the company's revenues.

Bison Bial produces machine tool fixtures, a sector in overcapacity in the EU. The company started to register important losses in 2001, due to the appreciation of the zloty, the difficulties of the parent company and the slump in its main export markets. The workforce went down from 1680 workers in 2000 to 950 today.

In May 2006 Poland notified its intention to grant the company a public debt cancellation of €4 million and a loan on preferential conditions amounting to €4.2 million.

Aid to finance the restructuring of a company in difficulties raises particular competition concerns, as it might unfairly shift the burden of structural adjustment on other, more efficient, producers who are operating without aid. Such aid is therefore allowed only when it meets the stringent conditions of the Community guidelines on rescue and restructuring aid.

The Commission concluded that Bison Bial's restructuring plan would be sufficient to restore the long term viability of the company in this difficult market, provided that the planned extended investment programme is implemented. However, considering the overcapacity of the industry at the European level, safeguards have to be implemented to prevent undue distortions of competition transferring Bison Bial's problems to other producers. In this context, Bison Bial has to reduce its market presence by selling a production division generating 13 % of the company's revenues. The Commission also ensured that the state aid is limited to the minimum necessary and would not provide the firm with surplus cash. In this respect, the fact that half of the aid is granted in the form of a loan that will have to be reimbursed is a positive element. [13 September 07]