No L 119/38 Official Journal of the European Communities 7. 5. 88 - COMMISSION DECISION i of 9 December 1987 on aid from the French Government to the wood-processing sector (Isoroy and Pinault) ll (Only the French text is authentic) (88/282/EEC) 7 THE COMMISSION OF THE EUROPEAN COMMUNITIES, Having regard to the Treaty establishing the European Economic Community, and in particular the first subparagraph of Article 93 (2) thereof, Having given the interested parties notice to submit their observations in accordance with the said Article, and having regard to those observations, - Whereas : I The Isoroy group was created on 25 February 1983, with effect from 1 January 1982, through the merger of three firms in the wood-processing sector (Leroy, Isorel and Baradel). In 1983, the French Government assisted the merger by providing FF 12 million in subsidies and FF 112 million in equity loans without giving prior notifi- cation to the Commission under Article 93 (3) of the EEC Treaty. ‘ Isoroy never became profitable, its losses reaching FF 175 million in 1982, FF 124 million in 1983, FF 237 million in 1984 and FF 201 million in 1985, which corresponds to 9%, 6%, 12% and 11 % respectively of annual turnover. The group’s continuous losses prompted further aid from the French Government in 19885, this time in the form of a subsidy of FF 68 million, equity loans totalling FF 40 million and a fiscal moratorium on the sums owed by Isoroy to the public authorities amounting to FF 98,5 million ; this again was done without informing the Commission beforehand. ‘ In spite of the repeated injections of aid, Isoroy was soon compelled to suspend payments and was allowed by the “Iribunal de Commerce’ of Caen to continue operations . from 2 April to 30 September 1986, under the supervision of the Court. On 21 July 1986, the ‘Tribunal de Commerce’ ruled on two alternative plans for a takeover, both of which were limited to Isoroy’s assets as its debts by now totalled FF 2200 million. The plan put forward by the Pinault group involved a complete takeover, whilst Seribo, representing several European firms, planned to split up Isoroy among those firms. : “ The Pinault plan had the backing of the French Government, which had agreed in principle to contribute FF 250 million towards the financing. The French Government’s preference was also made clear in the staternent by the ‘Substitut du Procureur de la République’ (deputy public prosecutor) in favour of the Pinault plan which he gave in open court at the Tribunal in question. ' The Tribunal ruled in favour of the Pinault proposal, on the basis that the plan provided for a total takeover, and would maintain Isoroy as a coherent body in the French economy, saving a considerable number of jobs. i i The Tribunal then authorized the transfer of all stocks, shares, assets and debts to the ‘Société Commerciale et Industrielle du Meuble’ (SCIM), part of the Pinault group, for a largely symbolic sum provided, however, that public and private financing was available by 1 October 1986, 'in accordance with the plan. That condition having been fulfilled, the takeover was finalized on that date. II \ The Commission, learning that Isoroy has received several large amounts of aid, invited the French Government by letter dated 23 January 1986 to provide it with detailed information on assistance granted to Isoroy since its creation in 1982, together with the precise conditions attached to the equity loans granted. The French Government replied by letter of 15 May 1986 containing information on the establishing of Isoroy, the subsidies granted in 1982 and 1985, the cuts in capacity and their effects on employment, and on the cessation of payments, but not on the arrangements in respect of the equity loans or the existence of a moratorium wvis-@-vis the public authorities, nor on the intention of the French Government to provide further assistance in the event of a takeover by Pinault. On the contrary, it expressed the opinion that it was not for the French authorities to comment on the outcome of the ongoing collective procedures as this was a matter for the national legal authorities.