Europese Commissie stemt in met Franse staatssteun van half miljard euro aan IT-firma Bull (en)

woensdag 1 december 2004

The European Commission has authorised aid notified by the French Government in support of the restructuring plan for the IT firm Bull. France has undertaken not to disburse this final restructuring aid before 31 December 2004. The aid will furthermore be paid only after rescue aid granted in 2001 and 2002 has been reimbursed. Under these conditions, the Commission considers that restoration of the company's viability is sufficiently ensured and that, although the amount of the aid is large, it is compatible with the EC Treaty rules (Article 87), which stipulate that state aid must not create undue distortions of competition.

The aid, notified by France in February 2004, will take the form of a grant of €517 million. In return for the aid, France is imposing a better fortunes clause whereby Bull is to pay the French Government 23.5% of its pre-tax current profits over a period of eight years beginning in 2005. On the basis of the financial forecasts, this clause represents a present value of between €50 and €60 million.

The French authorities will pay out the new aid at the earliest on 31 December 2004. The rescue aid granted in 2001 and 2002 (see IP/02/1666) will first be reimbursed.

The aid notified by France in February 2004 will contribute to Bull's financial restructuring on the basis of a new restructuring plan. The plan involves a steep reduction in overheads, a payroll cut to 7 800 at the end of 2003 and refocusing on the company's strengths: GCOS proprietary servers, IT services linked to its branded products, and development of a new range of open servers. In terms of finance, the two main aspects of the plan, apart from the aid, are:

  • a reduction of around 90% in the company's debt of €204 million towards convertible bond holders, in combination with an offer for converting their bonds into shares or shares with warrants to subscribe for shares;
  • a rights issue launched on the market in June 2004 and underwritten by a group of investors, which brought Bull €44.3 million in fresh capital.

The Commission assessed the notified aid in the light of the Community guidelines on state aid for rescuing and restructuring firms in difficulty adopted in 1999 (see IP/99/470) and based the decision it took today on the following findings:

  • the plan offers an adequate guarantee of return to viability for Bull, despite the difficulties inherent in the rapid pace of technological and commercial developments in the sector concerned;
  • Bull's market shares are very small, particularly when compared with the likes of IBM, HP and Sun Microsystems, and it has divested large assets, so that there will be no undue distortions of competition;
  • the aid is limited to the minimum necessary and will not provide the company with surplus cash, its strategy being that of a niche player.

Background

Bull is an international group which operates mainly in the areas of up-market professional servers and specialised computer engineering services. Its turnover in 2003 was €1 265 million. In 1999 it was forced to sell assets. Since 2001 its position has deteriorated owing to the stockmarket crisis affecting technology stocks, the crisis in the Internet sector and the collapse of telecommunications markets.

Bull designs and supplies a range of large professional servers based on the proprietary operating system GCOS. It also sells servers using IBM and NEC technology. In addition, it provides its customers with maintenance services directly linked to the servers.

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