European Commission (EC) opened (20-Nov-2012) an in-depth investigation to verify whether a number of public support measures in favour of Adria Airways are in line with EU state aid rules. These measures include four capital injections between 2007 and 2011 amounting to around EUR85.5 million. The EC "has doubts that they were granted on market terms. The opening of an in-depth investigation gives interested third parties an opportunity to submit comments on the measures under assessment. It does not prejudge the outcome of the investigation". The EC noted the "majority State-owned company has been facing financial difficulties for several years and has had a negative net result since at least 2008. In order to address these difficulties, Adria Airways adopted a 'Financial and Business Restructuring Program' plan in September 2011". The Commission identified several public measures in favour of Adria Airways as follows:
- Four capital injections were carried out in 2007, 2009, 2010 and 2011, amounting to approximately EUR85.5 million. The EC noted, "These capital increases were carried out either directly by Slovenia or through the State-owned holding Posebna družba za podjetniško svetovanje d.d. (PDP) or its predecessor Kapitalska druzba d.d. (KAD). The 2007 and 2009 capital injections were subscribed almost in their entirety by KAD. The 2010 capital increase was funded at 80% by PDP and at 20% by two tourist agencies. In 2011, Slovenia and PDP injected €50 million in cash into Adria Airways, while a number of banks – including the majority State-owned Nova Ljubljanska Banka d.d. (NLB) – converted into equity €19.7 million of debt";
- The EC found PDP and the majority state-owned manager of Ljubljana's airport respectively acquired 52.3% and 47.7% of Adria Airway's subsidiary Adria Airways Tehnika between Oct-2010 and Mar-2011.
The EC will now investigate whether one or more of the identified measures constitute state aid in the meaning of EU rules. [more - original PR]