Its decision removes the question mark hanging over the future of the company, which has, until now, been faced with the possibility that its privatisation in 2006 could collapse in the event that the commission ordered the company to pay back aid it received from the government prior to the operation.
The commission is still investigating subsidies granted the company last year under the terms of the public service concession for the provision of ferry services between the French mainland and the island of Corsica. This investigation is separate from the one just concluded and is unlikely to pose a threat to SNCM’s existence.
The investigation just concluded began in August 2002 after France notified to the commission a restructuring plan it had drawn up for the struggling ferry company, which included the provision of state aid totalling €76m ($119m).
In September 2006, the commission announced that it was extending its investigation to take into account the decision of the government of the day to privatise the company.
The government reduced its shareholding in SNCM to 25% and sold 38% and 28% stakes to Butler Capital Partners and Veolia Transport, leaving the remaining 9% in the hands of the company’s employees.
To prepare the company for privatisation, however, it agreed to inject into the company €158m in the form of a €142.5m recapitalisation and pensions provisions totalling €15.5m and to make available €38.5m to fund a planned redundancy programme.
The commission has now concluded that the measures taken by France under the privatisation plan “do not constitute state aid”.
And it added: “In the commission’s view, the French government acted as a well-informed investor when it partially sold off SNCM at the negative price of €158m."
“This is because, in partially selling off the company at a negative price as opposed to winding it up, France took what was for it the most advantageous option.”
Similarly, an €8.75m cash injection paid by the state as part of a joint operation with the company’s new shareholders was not state aid, while the €38.5m financing of the future redundancy programme had not “relieved SNCM of its normal burden”, the commission said.
As for the cash injection notified by the French government in 2002, this had been “compatible with the common market”, it ruled.
Veolia Transport, which has managerial control of SNCM, simply noted “noted the positive decision in favour of SNCM”, which it said marked “a new stage in the recovery and long-term existence” of the company.