By Frances Robinson

BRUSSELS–The European Commission has opened an in-depth investigation to verify whether numerous public support measures granted by Portugal to the shipyard Estaleiros Navais de Viana do Castelo S.A. are in line with EU state aid rules.

At this stage, the commission has doubts that these measures were carried out on terms that a private operator would have accepted under market conditions. The opening of an in-depth investigation gives interested third parties an opportunity to comment on the measures under assessment. It does not prejudge the outcome of the investigation.

On the basis of the commission’s preliminary assessment, it appears that the shipyard, also known as ENVC, may have benefited from several aid measures in the past worth more than 180 million euros ($239 million). These measures include interest-bearing loans to cover operating costs provided in 2012, a capital increase carried out in 2006 and several loans granted between 2006 and 2011 to cover operating costs. In addition, it appears that EMPORDEF, the state-owned holding which fully owns ENVC, has issued numerous comfort letters and guarantees in support of financing agreements between ENVC and commercial banks.

-Write to Frances Robinson at frances.robinson@dowjones.com

(c) 2013 Dow Jones & Company

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