6.7.2000 Official Journal of the European Communities L 165/25 COMMISSION DECISION of 16 November 1999 on aid granted by France to Gooding Consumer Electronics Ltd in connection with the purchase of the former Grundig plant at Creutzwald (notified under document number C(1999) 4230) (Only the French text is authentic) (Text with EEA relevance) (2000/425EC) THE COMMISSION OF THE EUROPEAN COMMUNITIES, Having regard to the Treaty establishing the European Community, and in particular the first subparagraph of Article 88(2) thereof, Having regard to the Agreement on the European Economic Area, and in particular Article 62(1)(a) thereof, Having, in accordance with the abovementioned Articles, given the parties concerned notice to submit their comments, Whereas: I. PROCEDURE Following the publication of various articles in the press, the Commission's attention was drawn to the aid which the French authorities were planning to grant to the former Grundig plant in Creutzwald which had recently been acquired by Gooding Consumer Electronics Ltd (hereinafter GCE). The information sent by the French authorities at the Commission's request between 16 June 1994 and 29 March 1995 and the documents attached to the letter of 5 January 1995 confirmed that some of the aid had been granted. There are two aid packages: one for research and development (R&D) and one for restruc- turing (also referred to as back-up aid): (a) the first package totalled FRF 10 million (ECU 1,52 million), granted under the ‘electronics industry’ scheme approved by the Commission (!); (b) the second totalled FRF 36 million (ECU 5,5 million), of which FRF 24 million was provided by the State and FRF 12 million by the regional author- ities. In both cases, the aid was granted on an ad hoc basis. The purchase of the former Grundig plant by GCE was part of a takeover plan which was initiated on 30 March 1994 and had two objectives: to restructure the firm, known as Gooding Electronique SA (hereinafter GESA), and restore its long-term viability. The guidelines for () The Commission decision was communicated to the French authori- ties by letter of 1 December 1986. action put forward by the buyer focused on (i) reor- ienting production (quality mono television sets and introduction of satellite receiver technology, a market with rapid growth potential), (ii) establishing a degree of production security through orders guaranteed by the former shareholder Grundig, (iii) reducing output and employment, (iv) acquiring a very popular brand under which it could sell a large proportion of its own prod- ucts and (v) creating a distribution and manufacturing network — original equipment manufacturing (OEM). In 1994, GESA employed 350 persons, ic. 38 % fewer than the 562 employees of the former Grundig plant. After restructuring and in order to rationalise the invest- ment, GESA cut capacity to some 300 000 television sets a year against the 578 000 sets produced by Grundig in 1990/91. GCE/GESA were operating on a European market with an estimated output, according to a market study communicated by the French authorities, of 16,7 million colour television sets in 1993. Thus their market share at the time was some 1,74 %. In the same year, demand in the same European market accounted for 21,5 million sets. On 3 and 25 July 1995, the French authorities informed the Commission that GESA had filed for bankruptcy on 22 June 1995. Other data on the position of the firm and on the compulsory administration and winding-up proceedings subsequently reached the Commission, most recently on 20 October 1997. On several occasions throughout the examination of this case, the French authorities asked the Commission to take account of recent developments in the legal proceedings before it decided to initiate proceedings under Article 88(2) of the Treaty as such a decision ‘could make it more difficult for the firm to recover. GESA was granted an observation period of six months, renewable several times, by the Metz Regional Court (Tribunal de grande instance), in accordance with Law No 85/98 of 25 January 1985 on compulsory adminis- tration and winding-up proceedings. On 16 April 1997, France informed the Commission that, on 21 February