Ultimatum from Commission to LARCO – Sale or shutdown with return of 136 million euros

The LARCO case is at point “zero” one and a half years after the start of the special liquidation-management and privatization procedures by the government.

According to information available to OT the co-responsible Ministries of Finance and Environment and Energy are under pressure from the DG COMP (Directorate-General for Competition of the European Commission) to close the case. Pressure for new lawsuits against our country and suffocating monitoring of the steps taken to prepare the tenders and the removal of administrative obstacles are included in the agenda of the communication of the Brussels officials with the authorities of Athens.

Greece has not complied with the decision of the European Court (2017) with which LARCO is called upon to return to the Greek state illegal state aid amounting to 136 million euros that it received in previous years. The name of Greece will be heard again in the courts the day after tomorrow, Thursday, January 20, when the appeal of the Greek state and LARCO will be heard, with which they dispute that 30 million euros out of the total 136 million euros are illegal state aid (guaranteed by Greek government on a loan from the Agricultural Bank to industry).

Losses of 12-15 million euros per month

“The LARCO case remains open and carries the burdens and pathogenesis of years, over time by all governments,” he comments to OT. A source who is able to know the latest developments and notes: “It puts in the state budget by 12 to 15 million euros per month and the country is threatened with a new lawsuit both for the return of 136 million euros and for the payment of fines for each day of its non-compliance with the decision of the European Court of Justice “.

Under this suffocating regime, the HRADF and the Special Administrator have run within a year and a half the procedures for the two tenders for the concession of the assets of the iron-nickel industry. They are in the final phase before the submission of binding offers from the last quarter of last year but the dates are constantly being postponed.

The engagements include the huge environmental issues that the new owner is called upon to manage, the fate of the approximately 1,000 employees and the transfer of the factory to Larymna in operation.

It is characteristic, according to information, that the three candidate investment schemes that are in the final phase of the tenders have made many remarks in the contractual texts, seeking to safeguard their interests but also to reduce the business risk they undertake.

Ratcheting up the pressure

On the other hand, the HRADF and the Special Administrator are in being squeezed by DG COMP, monitoring each process and requesting explanations and information on their actions on the road to the final outcome of the issue.

The government is reportedly obstructing the privatization process, according to sources, seeking the best possible solution for the 1,000 employees. According to sources, about 200 of them have paved the way for retirement. For the rest, their job security is sought after the end of the LARCO concession.

New date

According to information, the new goals set for the transfer of LARCO’s assets are that by the end of January the contractual texts of the tenders and the transfer of the factory and the mines have been finalized. By the end of the first quarter of 2022 (late February to early March) the tenders must be completed with the submission of binding offers.

The aforementioned dates, according to the same information, are said to be the last margin given by DG COMP to the government. If the tenders are not made or successful then the final shutdown seems inevitable as of course is the government’s compliance with the return of 136 million euros along with the payment of fines.

If they are held and a new investor is found, then the Greek government has a serious chance of deleting the illegal state aid.

It is reminded that the first tender conducted by the Special Administrator concerns the transfer of the mines of Evia, Fthiotida, Viotia (Agios Ioannis area) and Kastoria, stocks of ores, by-products and recyclable materials as well as agricultural plots.

The second tender of the Privatization Fund concerns the long-term lease of the LARCO factory and the mines in Larymna and Loutsi. These are facilities and mining rights that belong to the state.