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Rescue and Restructuring Aid for Companies in Financial Difficulty: Case Studies

3 March 2020

Two recent decisions announced by the European Commission on February 24, place Romania in the position to recover over EUR 583 million plus interest as incompatible state aid granted to CFR Marfa, respectively to the National Uranium Company.

The European Commission found that the railway transport operator CFR Marfă received at least EUR 570 million incompatible state aid from Romania, through a debt write-off and failure to collect debts from the company.

Also, the European Commission has established that several support measures of the Romanian state in favour of the National Uranium Company, included in a restructuring plan presented to the Commission and consisting of a series of grants, subsidies, debt write-off and debt-to-equity conversion do not comply with European Union rules on state aid granted to companies in difficulty. At the same time, the Romanian state has to recover a rescue aid of approximately EUR 13 million, which the National Uranium Company received in 2016 through a rescue loan granted to keep the company afloat, temporarily approved by the European Commission in September 2016.

Here is a more detailed analysis of these two cases, as well as of the rules applicable to rescue and restructuring aid.