Brussels, 17 October 2001
Green light to the bridging loan for SABENA in the context of pre-bankruptcy proceedings
The European Commission has decided to authorise the bridging loan of €125 million granted to Sabena by the Belgian authorities as rescue aid. Unlike restructuring aid, rescue aid is not subject to the "one time, last time" principle.
The Commission has decided to authorise as rescue aid the bridging loan of €125 million the Belgian authorities are planning to grant Sabena.
Rescue aid is by nature temporary assistance. It should make it possible to keep an ailing firm afloat for the time needed to work out a restructuring or liquidation plan. In keeping with the Commission's 1999 Guidelines on State aid for rescuing and restructuring firms in difficulty,1 a firm is regarded as being in difficulty where it is unable, whether through its own resources or with the funds it is able to obtain from its owners/shareholders or creditors, to stem losses which, without outside intervention by the public authorities, would almost certainly condemn it to go out of business in the short or medium term.
Rescue aid is subject to strict rules. In order to be authorised, it must among other things comply with the following five conditions:
take the form of loan guarantees or interest-bearing loans at market rates;
be limited to the amount strictly necessary to keep the firm in business (for example by covering wage or salary costs or routine supplies);
be granted for a period not exceeding six months;
be warranted on the grounds of serious social difficulties and have no unduly adverse spillover effects on other Member States;
be accompanied by an undertaking to restructure or liquidate the aid beneficiary, or to reimburse the loans.
The aim of rescue aid is to permit the assisted firm to survive for a short period. This time must be used to assess in detail the prospects for future viability of the economic activities under threat.
The European Commission stresses that State aid to the restructuring of airlines is subject to the "one time, last time" principle. As Sabena already received restructuring aid in 1991, its restructuring plan cannot under any circumstances include State aid of any kind.