France asks EU to agree Bull rescue plan

4th March 2004, Comments 0 comments

BRUSSELS, March 4 (AFP) - The French government is seeking clearance from EU competition authorities for a rescue plan for embattled computer group Bull, the European Commission said Thursday.

BRUSSELS, March 4 (AFP) - The French government is seeking clearance from EU competition authorities for a rescue plan for embattled computer group Bull, the European Commission said Thursday.

According to EU officials, under the proposed plan the French state would in effect write off a loan of EUR 450 million (USD 548 million) owed by the debt-ridden company, whose non-French shareholders include Japanese group NEC and US firm Motorola.

"As it involves a state intervention element, we have to be notified. We have received a draft which we are currently scrutinizing," said Tilman Lueder, a spokesman for EU competition commissioner Mario Monti.

According to EU officials, the plan involves giving state aid to restructure the company which would be enough to pay off the EUR 450 million loan.

The aid, if approved by Brussels, would in fact amount to a "virtual operation" to allow Bull to meet its obligation. It could amount to EUR 500 million, to take into account interest owed on the loan, said one official.

But the official said the proposed procedure was not unusual, and had for example been used recently in the case of a German bank.

The comments came after the French daily Les Echos said a plan for a capital increase would be applied in 2005 and would enable the group to repay the loan of EUR 450 million (USD 549 million) made by the state in 2002.

EU authorities approved the 2002 loan on condition that it be repaid in June 2003, but the company was unable to do so.

In November the EU Commission took action against France at the European Court of Justice for not claiming the money back.

The financial daily noted that France would not be able to give any help to Bull before 2005 because the company had received such help in 1994 and EU competition rules ban a second rescue within 10 years.

Bull, which employs about 8,000 staff, has enormous debts. The main shareholders are France Telecom which is controlled by the state, Japan's NEC and US group Motorola, each with 16.9 percent, the French state with a direct 16.3 percent and Dai Nippon Printing with 5.3 percent.

© AFP

                                                              Subject: France news

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