14. 8. 87 Official Journal of the European Communities No L 227/45 COMMISSION DECISION T of 4 February 1987 concerning aid to a Belgian steel pipe and tube manufacturer (Only the French and Dutch texts are autherntic) (87/418/EEC) THE COMMISSION OF THE EUROPEAN COMMUNITIES, Having regard to the Treaty establishing the European Economic Community, and in particular the first subpara- graph of Article 93 (2) thereof, Having given the parties concerned- notice to submit their comments, in accordance with that provision, and having regard to those comments, Whereas : I On 19 July 1984 the Belgian Government notified the Commission, in accordance with Article 93 (3) of the EEC Treaty, of its intention to provide further funding to a state-owned steel pipe and tube manufacturer in the Liége area by subscribing to a Bfrs 1,8 billion capital increase and a Bfrs 2,2 billion issue of conditional participating convertible bonds. The Commission had already auth- orized a package of aid for the firm in 1982. The Commission later learnt (and the Belgian Govern- ment confirmed this by letter dated 29 July 1985) that, apart from the aid notified on 19 July 1984, the Govern- ment had previously given the firm further assistance without authorization by the Commission, and thus in contravention of Article 93 (3) of the Treaty. The unauthorized aid and that notified on 19 July 1984 came to a total of Bfrs 9 085 million, to which must be added Bfrs 1212 million of regional aid granted under the Economic Expansion Laws. ‘A preliminary scrutiny of the casé showed that the firm was still making heavy losses in spite of a modernization programme and the aifl it had already received. The firm’s prospects for future recovery were also considered doubtful by the Commission, as the management was relying for an improvement in its financial position on a diversification into tubes at the top end of the quality range and to more profitable markets than those pre- viously served by the firm. This strategy was thought un- likely to succeed, as the overcapacity in the industry . would make it difficult for any firm to capture a new market share. : _ For these reasons, and because the aid was likely to cause major distortions of competition on a sensitive market, the Commission decided to open the procedure laid .down in Article 93 (2) of the Treaty in order to hear the views of all concerned. By letter of 5 July 1985 it gave the Belgian Government notice of the opening of the procedure and called for its observations. Comments were also invited from other Member States by letters dated 12 July 1985 and from other interested parties by a mnotice in the Official Journal of the European Communztzes on 16 July 1985 (). In spite of the pending Article 93 (2) procedure the Belgnan Government went ahead with payment of the aid it had notified on 19 July 1984. By letter of 6 June 1986, the Belgian Government noti- fied its proposal to grant further aid to the company in the form of the conversion of Bfrs 3010 million of guaranteed loans into capital. On 1 August 1986 the Commission extended the Article 93 (2) procedure to this further aid and called on the Belgian Government to submit  its observations. Comments were also invited from the other Member States by letter dated 10 November 1986 and from interested parties by a notice in the Official Journal of the European Communities on 19 November 1986 (3). In spite of the procedure pending, the Belgian' Govern- ment went ahead with conversion of Bfrs 2 510 mllhon of debts into capital. Thus, all the aid covered by the procedures, except for the proposed conversion of Bfrs 500 million of debts into capital, has already been provnded in disregard of Article 93 (3) of the Treaty. II In its observations sent by letters of 29 July 1985 and 5 September 1986, in reply to the opening and extension of the procedure, the Belgian Government argued, in the first place, that the funding it had provided to the firm was not likely to distort competition. Mainly because of cost overruns on the investment programme begun in 1982, the funding the Government - had provided with the Commission’s approval up to 1982 and the later unauthorized payments had not even been - enough to restore the firm’s financial position. ; 0 j NO C 178, 16. 7. 1985, p. 2. No C 293, 19. 11. 1986, p. 3.