The Commission has opened a formal investigation under EC Treaty state aid rules into possible aid of up to €26 million granted to Mittal Steel Roman, formerly Petrotub. In particular, the investigation will look at the fact that several public authorities agreed to waive and reschedule part of their outstanding debts in the context of the privatisation of the company in 2003. The Commission needs to verify whether these waivers and rescheduling fulfil the so-called market economy operator test, i.e. whether the privatisation was economically more advantageous for the state authorities than the liquidation of the company. The opening of a formal investigation gives interested parties an opportunity to comment on the measures under assessment. It does not prejudge the outcome of the procedure.
Mittal Steel Roman is a producer of pipes and tubes located in Roman, Romania. Before privatisation the company was called Petrotub and the state was the majority owner. In 2003, the company was sold to Mittal Steel. In the context of the privatisation several public authorities agreed to waive outstanding debts of around €25 million and to reschedule debts of €0.52 million before the company was sold off. These waivers and rescheduling potentially constitute state aid.
The Romanian authorities argue that the privatisation, taking into account the waivers and debt rescheduling, was economically more advantageous for the state than the liquidation of the company. The Romanian authorities therefore maintain that when waiving and rescheduling the debts, the State had acted as a market economy operator, trying to achieve the economically best result. If this was the case, the waivers and debt rescheduling would not constitute state aid.
However, the Commission has doubts that the privatisation was economically more advantageous for the public authorities than the liquidation of the company. First, the Commission doubts that all public authorities together can be regarded as a single creditor. Rather, the privatisation would have to be the more advantageous solution for each of them. (Secondly, the Commission questions the calculation of the liquidation costs as presented by the Romanian authorities.
The measures were granted before Romania's accession to the EU in 2007. However, Mittal Steel Roman operates in the steel sector and the Romanian Accession Treaty contains specific provisions, enabling the Commission to control aid granted for restructuring of the steel industry even before accession. [26 September 07]