State aid for Nová Huť has a green light

The Chairman of the Office for the Protection of Competition approved by his decision coming into force on 18 December 2002 an exemption from the prohibition of state aid in favour of company Nová Huť, a.s.

The exemption relates to:

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• An operational credit provided by Konsolidační banka Praha in total amount of CZK 750 million,
• Assignment of credit receivables of Česká konsolidační agentura from company Nová Huť (hereinafter “NH”) in nominal amount of CZK 3800 million by company LNM Holdings N.V. for USD 10.86 million,
• Reimbursement of NH´s obligation resulting from emitted debentures in amount of CZK 1254 million by Česká konsolidační agentura,
• Remission of penalty from VAT by the Ministry of Finance, which constitutes state aid in amount of CZK 93.779743 million.
• Remission of a part of the costs of execution in amount of CZK 3 million from the total amount of CZK 14.152110 million by the Ministry of Finance, which constitutes state aid in amount of CZK 3 million,

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“It was not possible to approve state aid to the area of steel industry for the reason of non-existence of an exemption for the Czech steel industry approved by the European Union,” said the Chairman of the Office, Mr. Josef Bednář, who had approved the aid to Nová Huť under certain conditions.

The providers of state aid (the Ministry of Finance and the Ministry of Industry and Trade) shall ensure that provision of state aid is fully harmonised with the conditions stipulated in the document Joint position of the EU of 22 October 2002. Further, a time schedule for implementation of restructuring scheme for NH will be elaborated, including the plan for reduction of capacities and the document, approved by the European Commission will be, alike the modified business plan of the company, submitted to the Office before the end of the next year.

Before the end of 2003, the Office should be, according to the stipulated conditions, submitted also an evaluation report on the course of restructuring of the company, which will be updated every following six months until 1 March 2007. The last condition of the decision stipulates that the experts authorised by the European Commission and the Office must be allowed to enter the estates of Nová Huť and they must be given the possibility to inspect its trade books and other business records, make extracts from them and require an on-spot explanation.

Press and Information Department