HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN"L 12/38
EN
Official Journal of the European Union
16.1.2013
COMMISSION DECISION
of 25 July 2012
on the State aid n o SA.33114 (2012/C) (ex. 2011/NN) — Poland Alleged aid to Crist Shipyard
(notified under document C(2012) 5057)
(Only the Polish version is authentic)
(Text with EEA relevance)
(2013/9/EU)
THE EUROPEAN COMMISSION,
documents regarding the transaction. The information
was submitted on 25 November 2010 and on
5 December 2011.
Having regard to the Treaty on the Functioning of the European
Union, and in particular the first subparagraph of Article 108(2)
thereof,
(3) The
Commission
met
with
the
Polish
authorities
on
6 December 2011.
Having regard to the Agreement on the European Economic
Area, and in particular Article 62(1)(a) thereof,
(4) A
series
of
exchanges
took
place
between
Vice-President
Almunia and the Polish Minister of Treasury, Mr Grad,
culminating in a letter from Mr Grad dated 25 October
2011 and informing the Commission that the end of the
Having called on interested parties to submit their comments
liquidation procedure was planned for the end of 2011
pursuant to the provisions cited above (
for both the Gdynia Shipyard and the Szczecin Shipyard.

1 ),
(5) By
letter
dated
25
January
2012,
the
Commission
Whereas:
informed Poland that it had decided to initiate the
procedure laid down in Article 108(2) of the Treaty on
the Functioning of the European Union (hereinafter
I.
"
PROCEDURE
TFEU") in respect of the measure at stake (hereinafter
“the opening decision”).
(1) On
6
November
2008,
the
Commission
adopted
two
recovery decisions ( 2 ) concerning unlawful State aid to
the shipyards in Gdynia and Szczecin (hereinafter the
(6) The
opening
decision
was
published
in
the Official Journal
“Gdynia Shipyard” and the “Szczecin Shipyard”)
of the European Union (
allowing a special sales procedure. The Polish authorities

3 ). The Commission invited
interested parties to submit their comments on the
were given the opportunity to sell the yards' assets in
measure.
bundles in open, transparent, unconditional and non-
discriminatory tenders.
(7) Poland
submitted
its
comments
on
27
February
2012.
No comments from third parties were received. Further
(2) The Commission, while following up the recovery
information was provided by Poland on 4 and 5 June
process, requested clarifications about the tender
2012.
procedures mentioned above. Following press reports
that the State-owned Industrial Development Agency
(hereinafter "IDA") may have granted in September
2010 a loan (hereinafter "the measure", to Crist S.A.
II. BACKGROUND TO THE CASE
(hereinafter "Crist" or "the company") for the purchase
1. Description of the beneficiary
of certain assets of the Gdynia Shipyard, the Commission

requested clarifications on this issue at a meeting with
(8) According
to
the
Polish
authorities,
Crist,
a
private
the Polish authorities on 22 October 2010. The Polish
company located in Gdask, was established in 1990
authorities explained their position and undertook to
by its two current shareholders. It has about 150
submit all necessary information and corroborating
employees and about 500 self-employed contractors
providing services to the company. The main fields of
( 1 ) OJ C 129 of 4.5.2012, p. 9.
Crist's activities are shipbuilding, ship repair and hydro-
( 2 ) Commission Decision of 6 November 2008 on State aid C 19/05
technical installations. In the period between 2004 and
(ex N 203/05) granted by Poland to Stocznia Szczeciska, OJ L 5,
2008, the company worked yearly on about 20 ships
8.1.2010, p. 1, and Commission Decision of 6 November 2008 on
State aid C 17/05 (ex N 194/05 and PL 34/04) granted by Poland to
Stocznia Gdynia, OJ L 33, 4.2.2010, p. 1.
( 3 ) See footnote 1.

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EN
16.1.2013 Official
Journal
of
the
European
Union L
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and other constructions. The company's customers are
to PLN 236 million (EUR 59 million) but reached
mainly ship owners from Europe (Germany, the Nether
PLN 630 million (EUR 157,5 million) in 2011. The
lands, Scandinavia and Poland).
main financial results of Crist covering the period
2007-2009, that is prior the granting of the loan by
IDA, and the period 2010-2011, that is after the
(9)
According to the Polish authorities, the company is active
granting of the loan, are summarised in table 2.
mainly in the three following market segments:
— hydro-engineering construction market: steel
constructions used as locks, barrages, caissons and
Table 2
other steel constructions for the construction of
Main financial results of Crist 2007-2011 (in million PLN)
marine wharves and harbour jetties,
2007 2008 2009 2010 2011
— renewable energy market: arrangements and/or
Sales
323,41 361,06 383,77 236,48 630,29
elements used in the construction of marine wind
revenue
power farms,
Sales profit 19,10 20,80 27,10 5,5 53,1
— offshore market: survey, exploration and processing
Operating
20,80 19,50 25,80 15,37 49,33
installations operating off shore used to support
profit
drilling platforms and construction modules of the
steel drilling platforms.
Net profit 22,20 20,10 15,50 12,62 31,66
Depreciation 2,40 3,30 4,20 5,58 10,75
(10) The
structure
of
Crist’s
revenues
broken
down
by
market
segment is illustrated in table 1 below. The Polish auth
orities informed the Commission that this revenue
Financial
24,60 23,40 19,70 18,20 42,41
surplus
structure results from the implementation of the
business plan according to which the focus of activities
is to shift from traditional shipbuilding to the marine
sector of renewable energy and hydro-engineering.
(12) According to the Polish authorities, in 2011, the
company had credits and exposure limits of about PLN
Table 1
[…]* million (EUR […]million), including the IDA loan
(see Section 3 "Description of the measure") and financial
Crist revenue structure by segment
support in various forms granted by four private banks.
The company is currently engaged in the execution of 10
Revenue category 2009 2010
( 1 ) 2011
contracts with an aggregate value of about PLN […]
million (EUR […]million) and is negotiating further
hydro-engineering [17-23]
(*)
% [4-6]
% [3-5]
%
contracts worth in total approximately PLN […]
million (EUR […] million).
renewable energy [23-28]
% [75-80]
% [67-74]
%
offshore [21-26]
% [6-8]
% [6-8]
%
2. Description of the Programme
other (shipbuilding) [29-34]
% [9-12]
% [17-20]
%
(13) On
27
May
2010,
Crist
applied
for
the
IDA
loan
(see
(
Section 3 "Description of the measure") under the "Pro

1 ) The Commission notes that the sum of the figures provided by Poland
in the column for 2010 does not equal 100. The Commission believes
gramme of support by IDA of initiatives for the stimu
this minor discrepancy to be the result of rounding the figures to two
lation of the Polish economy" (hereinafter "the
decimal places.
Programme") in the programme subcategory of
(*) Business secret
"Support for undertakings in the most vulnerable
regions affected by the economic crisis".
(11) According to the Polish authorities, Crist increased
its revenues by a multiple of 10 over the period
2002-2009, reaching PLN
383 million in 2009
(14) The
companies
eligible
for
the
Programme
are
medium
(EUR 95,75 million (
and large enterprises implementing projects which aim at

4 ). The revenue decreased in 2010
stimulating demand in the Polish economy and are active
in the most vulnerable districts affected by the economic
( 4 ) Figures in EUR in this Decision are approximations provided only as
crisis or by severe floods. Such districts are clearly
indications with the exception of the EUR […]million figure, repre
defined by the Programme. The district of Gdask is
senting the value of the contract between Beluga Hochtief Offshore
and Crist, which is denominated in EUR. All figures in PLN are
one of the vulnerable districts as defined by the
converted into EUR by using the exchange rate EUR 1 = PLN 4.
Programme, while the district of Gdynia is not.

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L 12/40
EN
Official Journal of the European Union
16.1.2013
(15) According
to
the
Programme,
IDA
will
participate
in
Crist was 6,81 % ( 6 ). The interest rate was set at the level
projects and ventures to stimulate economic demand
of the base rate defined as the 3-month WIBOR ( 7 ) (equal
and economic development. IDA should benefit from a
to 3,81 % when the loan was granted) plus 1,2 % to
reasonable return, i.e. participation should be on market
which an interest margin of 1,8 % was added. The
terms. The maximum intensity of the financing provided
interest margin was set by IDA at 1,8 % as both the
by IDA cannot exceed 80 % of the net value of the
financial risk of this transaction and the collateral were
planned investment.
estimated as moderate, which, as shown in table 3,
should result in a margin of between 1,5 % and 1,8 %.
The maturity of the IDA loan is on 31 December 2015,
(16) According
to
the
Polish
authorities,
IDA
should
not
i.e. a duration of approximately 5 years and 3 months
support projects that could contain elements of State
since the measure was granted on 14 September 2010.
aid, with the exception of projects related to national
security and defence in line with Article 346 TFEU ( 5 ).
(21) The
collateral
for
the
IDA
loan
consists
of:
(17) The
Programme
constitutes
a
part
of
IDA’s
commercial
activity aimed at profit making, and applies, according to
— a registered pledge over 100 % of Crist shares,
the Polish authorities, standards relevant on the market
for commercial financing services for enterprises. As
explained by Poland, such activity is separate from the
— mortgage on real estate (part of Shipyard Area 2),
granting of State aid by IDA to large enterprises in
difficulty.
— a registered pledge on a number of movables forming
part of Shipyard Area 2,
3. Description of the measure
— a blank bill signed by Crist,
(18) The
measure
under
investigation
is
a
loan
of
PLN
150
million (EUR 33,4 million) granted by IDA to Crist on
14 September 2010 (hereinafter "the IDA loan") for the
— a statement by Crist on its voluntary submission to
purchase of an asset bundle including a dry dock, so
execution and
called Crist Shipyard Area 2. According to the Polish
authorities, at the time of granting, the loan represented
less than […] % of the total amount of the company's
— statements of each shareholder of Crist on their
credits and exposure limits.
voluntary submission to execution,
(19) Pursuant to the Programme, the interest rate for the IDA
(22) According to the Programme, the collateral must
loan should amount to the applicable base rate, increased
correspond to at least 150 % of the funding provided
by a net interest margin of 0,9 - 4 % per annum (here
by IDA.
inafter "the interest margin") according to the risk of the
financing and the quality of the collateral provided by the
beneficiary, as presented in table 3.
(23) The third tendering round for the sale of the Gdynia
Shipyard's assets took place on 15 September 2010.
According to the press, Crist was, as a result of the
Table 3
financing received from IDA, able to outbid another
competitor, Patia (a company registered in Cyprus,
Interest margin applicable to the measure according to the
connected with the Ukrainian company ISD – the
Programme
owner of the Gdask Shipyard). Crist bid PLN 175
million (EUR 43,75 million) to purchase the asset
bundle on offer (hereinafter referred to as the "dry
financial risk
strong
moderate
collateral
collateral
weak collateral
dock"). The floor price of the dry dock had been set at
PLN 96,7 million (EUR 24,17 million).
low 0,9
% 1,0
–
1,4
% 1,5
–
1,8
%
moderate 1,0
–
1,4
% 1,5
–
1,8
% 1,9
%
–
3,3
%
III. REASONS FOR OPENING THE FORMAL INVESTI
GATION PROCEDURE
high 1,5
–
1,8
% 1,9
%
–
3,3
% 3,4
%
–
4,0
%
(24) In the opening decision, the Commission expressed its
doubts as to whether Crist would have been able to
(20) The
interest
margin
for
the
IDA
loan
to
Crist
was
set
at
1,8 %. The overall interest rate of the loan received by
( 6 ) In the letter of 25 November 2010 Poland mistakenly informed the
Commission that the interest rate was set at the level of the base rate
defined as the 6 month WIBOR (instead of 3 month WIBOR) and
( 5 ) According to this Article: "The provisions of the Treaties shall not
that the overall interest rate of the loan received by Crist was 7,02 %
preclude the application of the following rules […] b) any Member
(instead of 6,81 %). Poland corrected that information by a letter of
State may take such measures as it considers necessary for the
27 February 2012.
protection of the essential interests of its security …".
( 7 ) Warsaw interbank reference rate.

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16.1.2013 Official
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of
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European
Union L
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obtain the necessary financing on similar terms on the
(30) Finally,
without
prejudice
to
the
question
of
whether
the
market on the basis of the information available to IDA
Programme as such constitutes State aid within the
at the moment of the decision granting the loan.
meaning of Article 107(1) TFEU, the Commission
raised doubts as to whether Crist was eligible for the
support provided by IDA pursuant to the Programme
as the loan was granted for an investment in Gdynia,
which not being a vulnerable district could not benefit
(25) According to the preliminary analysis of the measure on
the basis of the information available to the Commission
from the Programme. The Commission also queried
the IDA loan might have conferred an advantage on Crist
whether the intensity of IDA financing to Crist
through state resources. The Commission expressed its
complied with the maximum intensity threshold
concerns as to: (i) the rate at which the credit was
defined by the Programme (see recital 15). The IDA
granted, (ii) the collateral that IDA accepted, (iii) the
loan amounts to PLN 150 million (EUR 37,5 million).
benchmark used by IDA, (iv) the business plan
Crist purchased the dry dock for a price of PLN 175
submitted by Crist and (v) a possible preferential
million (EUR 43,75 million). On the basis of those
treatment of Crist by IDA.
figures, the aid intensity of the IDA loan was 86 %, i.e.

above the limit set out in the Programme. The
Commission therefore considered that Crist might have
received preferential treatment by being granted the IDA
loan under the Programme.
(26) As regards the rate, the Commission was not in a
position to determine whether the interest rate of the
IDA loan (assumed to be 7,02 % at the time of the
opening decision) was in line with the market economy
(31) In
light
of
the
above,
the
Commission
had
doubts
as
to
investor principle as the Polish authorities had not
whether a private investor would have provided Crist
provided evidence on the company's rating and the
with the relevant financing and decided to open the
level of collateral.
formal investigation procedure.
(27) With
regard
to
the
collateral,
the
underlying
contract
IV. COMMENTS FROM POLAND
between IDA and Crist for the IDA loan and the
expert evaluations of Crist's shares and of the dry dock
(32) The
Polish
authorities
submitted
that
a
comprehensive
given as collateral for the loan were not provided to the
assessment of the economic and financial situation of
Commission. The Commission therefore considered that
the company, of its business plan and of possible
Poland had not demonstrated prima facie that the expert
market references preceded the decision to grant the
evaluations were done in a conservative manner and that
loan to Crist and that it follows from the unambiguous
a private investor would have accepted such collateral.
results of this analysis that the loan in question
corresponds to normal market conditions, understood
as the conditions under which a private market
operator would agree to finance a particular investment.
Therefore, according to Poland, the IDA loan to Crist
(28) In relation to the benchmark, the Commission had
does not constitute Sate aid.
doubts as to whether the […] Bank loan could be used
as a benchmark to assess whether the IDA loan complies
with the private market investor principle. The
Commission considered that the […] Bank loan was
different from the IDA loan as: (i) it refinanced the trans
1. The interest rate
action which Crist had initially financed from its own
funds, (ii) the amount of the […] Bank loan was signifi
(33) Poland
explained
that
the
granting
of
the
IDA
loan
was
cantly lower, and (iii) the IDA loan entailed a higher risk
preceded by a three stage assessment of the company’s
compared to the […] Bank loan since its amount
economic and financial situation carried out according to
exceeded Crist's own funds and its duration was substan
standards relevant on the market of commercial financial
tially longer (five years and three months compared to
services offered for enterprises. It included, at the first
three years and eight months).
stage, an initial credit scoring by an independent

external adviser, on the basis of which the company
was marked for the purposes of qualifying for the next
stage, i.e. a more detailed assessment. During the second
stage, the last three accounting years were assessed
(29) On the business plan, the Commission noted that at the
together with the forecasted results, ratio analysis, quanti
time the loan was granted, despite the company's overall
tative measures such as liquidity ratio, asset turnover,
sound financial condition, Crist was facing a three year
capital structure, profitability and development as well
trend of decreasing net results. Given the market risks
as qualitative measures such as the quality of
involved, possible market overcapacity, and the fact that
management, level of dependence on the market and
the financial crisis was far from over when the measure
quality of the proposed collaterals. At the last stage,
was taken the Commission had doubts as to whether a
the level of margin was set by applying a matrix taking
private investor would have provided the financing in
into account the risks and the proposed level of
question.
collaterals established as a result of the expert analysis.

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L 12/42
EN
Official Journal of the European Union
16.1.2013
T h e r a t i n g o f C r i s t
(34) By referring to the dynamics of Crist’s results between 2006 and 2009 (see table 4) Poland stressed
that the economic and financial situation of the company at the moment of applying for the loan, as
established by the expert analysis, was good.
Table 4
Dynamics of Crist results, 2006-2009 (in million PLN)
2006 2007 Dynamics 2008 Dynamics 2009 Dynamics
Profit on sales 21,20 19,10 90,09
% 20,8 108,90
% 27,10 130,29
%
Operating profit 20,90 20,80 99,52
% 19,50 93,75
% 25,80 132,31
%
Net profit 16,50 22,20 134,55
% 20,10 90,54
% 15,50 77,11
%
Depreciation 1,97 2,40 121,83
% 3,30 137,50
% 4,20 127,27
%
Financial surplus 18,47 24,60 133,19
% 23,40 95,12
% 19,70 84,19
%
Revenues from sales 228,75 323,41 141,38
% 361,06 111,64
% 383,77 106,29
%
(35) As regards the decrease in the net financial result in
(38) On the basis of the above-mentioned analysis IDA set the
2008 and 2009, Poland explained that it was caused
company’s rating according to its three-level internal
by a change in the business model, that is accepting
system of assessment. Crist was assessed as representing
contracts of a higher value and providing higher profit
an average credit risk, good financial reliability and
ability but which are characterised by a long completion
sufficient capability to repay liabilities in a longer
period reaching up to 12-15 months. This means that
period of time, and also an increased resistance to unfa
the highest financial gains come at the completion of the
vourable economic conditions lasting for a longer period.
product and its transfer to the contractor.
Poland submitted that the result of the method used by
IDA is in line with the Commission’s Communication on
the revision of the method for setting the reference and
(36) The
assessment
of
the
business
plan
presented
by
Crist
discount rates ( 8 ) (“the Reference Rate Communication”).
was carried out by IDA on several levels. Poland
The data available to IDA was assessed to correspond to
explained that the plan was developed in cooperation
the rating category BBB (good), as defined by the rating
with […], the analysis of it was made by […] ("[…]")
agency EuroRating, but in order to err on the safe side
and a detailed examination of the document, including
Poland retained a BB rating for the purposes of checking
the assumptions and expected effects was made by IDA
the outcome of applying the Reference Rate Communi
experts. The Polish authorities observed that, at each
cation.
stage, the opinion on the document was positive and
submitted that its accuracy has been confirmed by the
real results achieved by Crist, which are in line with the
T h e c o l l a t e r a l
forecast figures or even exceed them. Poland further
explained that the favourable financial forecasts
(39) The
Polish
authorities
submitted
that
Crist
had
provided
presented by Crist were credible and confirmed by the
as collateral: a registered pledge over 100 % of Crist
concluded contracts.
shares, mortgage on real estate (part of Shipyard Area
2), a registered pledge on a number of movables forming
part of Shipyard Area 2, a blank bill signed by Crist, a
(37) As regards the profitability of the investment, Poland
statement by Crist on its voluntary submission to
submitted a detailed explanation of the calculated ratios
execution and statements of each shareholder of Crist
based on the cash flow, NPV (Net Present Value) ratio
on their voluntary submission to execution.
and IRR (Internal Rate of Return) ratio, which all proved
high. The NPV value of the project covering purchase of
the dry dock for the price of PLN 150 million was PLN
(40) Poland submitted expert valuations
of Crist’s shares
[…] million and the internal rate of return (IRR) was
carried out by […] using two methods: the assets
[…] %. Poland added that although in the end the dry
based valuation method (adjusted net assets method)
dock was purchased for PLN 175 million, the financial
dated 29 July 2010 and the income-based valuation
ratios are still very high for that transaction (NPV of PLN
[…] million and IRR of […] %).
( 8 ) OJ C 14 of 19.1.2008, p. 6.

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16.1.2013 Official
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of
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European
Union L
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method (discounted cash flow with an Adjusted Present
proposed to consider as a market value the counter
Value approach) dated 1 August 2010. The results of
offer of PLN 166 million which was made at the time
these two valuations differed to a considerable degree.
by the other offering company - Patia.
While the first method resulted in a value of PLN
[…]million, the second method showed almost PLN
[…]million. At the same time, in a separate document
submitted by the Polish authorities, dated 3 August
(43) Furthermore,
according
to
Poland
the
collateral
value
is
2010, […] demonstrated that the adjusted net assets
further strengthened by the varied nature of the collateral
method was closer to the liquidation value of the
components (real property, moveable property and
company and did not reflect the real value of Crist (in
financial assets) and the fact that all elements constituting
particular the equity capital). […] concluded that PLN
the collateral were free of any encumbrance prior to the
[…]million should be taken as the real value.
granting of the loan.

(41) As regards the value of the second element of the
(44) The
Polish
authorities
summarised
that,
on
the
basis
of
collateral, i.e. the mortgage on the real estate, Poland
the various valuations, the total value of collateral on the
provided an independent expert valuation of 4 March
loan was situated somewhere between PLN […] million
2009 which estimated the market value of the asset
and PLN […] million (see table 5). For the purpose of its
bundle at PLN 169,5 million (or PLN 84,7 million in a
internal rating, IDA had assessed Crist’s collateral to be
forced sale). In addition, IDA requested a post-transaction
moderate (see table 3). Referring to the Reference Rate
independent expert valuation in January 2011, provided
Communication rules (see table 6), the Polish authorities
to the Commission, which set the value of the mortgaged
submitted that the total value of the collateral, in line
real estate at PLN […] million.
with the market value, is PLN […]million ( 9 ) and
constitutes […] % of the loan granted. This level of
collateral significantly exceeds the level of the amount
(42) In
response
to
the
scepticism
of
the
Commission
as
to
of the loan and corresponds to the category of “high
whether the price paid by Crist in the third tendering
collateralisation”, as defined in the Reference Rate
round for the dry dock (PLN 175 million) can be taken
Communication, since the expected loss resulting from
as a proxy for the value of that collateral, Poland
default in the loan repayment (LGD) equals 0.
Table 5
The values of the collaterals depending on the adopted methods of valuation
Collateral object and method of valuation
Crist shares
Crist shares
Assets-based valuation Income-based valuation
method
method
(Adjusted Net Assets
(Adjusted present
Method)
Value)
Value (PLN) […] […]
Shipyard Area 2
169 471 000 TOTAL: TOTAL:
Market value method (income
[…] […]
based)
Shipyard Area 2 84
735
500 TOTAL: TOTAL:
Forced value sales […] […]
Collateral object and
method of valuation Shipyard Area 2
180 439 000 TOTAL: TOTAL:
Market value method (income
[…] […]
based)
Shipyard Area 2
166 000 000 TOTAL: TOTAL:
Value of the last counter-offer […] […]
( 9 ) Crist shares income-based valuation method (recommended by an
expert) at PLN […] million and mortgage on the real estate (part of
Shipyard Area 2) estimated by an expert at PLN 169,5 million.

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L 12/44
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Official Journal of the European Union
16.1.2013
(45) The
Polish
authorities
also
provided
a
[…]
report
that
(49) The
[…]
report
provided
by
Poland
contains
a
detailed
was prepared in May 2012, i.e. after the transaction took
estimate of Crist’s credit rating at the time of the trans
place. It contains inter alia a verification of the […] valu
action based on two different expert approaches. The
ations available to IDA at the time of the transaction.
rating models were developed by […] based on scoring/
Poland highlights the criticism of the net asset valuation:
rating models used by commercial banks. The report
[…] did not include any valuation of intangible assets
estimates Crist's rating to be within the (BB-B) range.
such as among others contract backlog, customer rela
[…] nevertheless finds the interest rate to be sufficient
tionships and workforce, which could have significant
in view of the high value of collaterals, which assessed
values and would increase the valuation results. […]
together indicate a high collateralisation.
concludes that that valuation significantly underestimates
the value of Crist equity. In relation to the income-based
valuation method, Poland observes that […] arrives at
similar values to those of […] (i.e. ca. PLN […] million).
2. The benchmark
(50) The
Polish
authorities
informed
the
Commission
that
the
T h e i n t e r e s t r a t e
[…] Bank loan was not the sole basis for setting the final

level of the interest rate for Crist, as this was done
(46) For the purposes of granting the loan, IDA assessed both
primarily on the basis of an internal assessment system.
the credit risk of the company and the level of collateral
Irrespective of the differences in the loans, Poland noted
provided as moderate. As a consequence the loan was
that both institutions, IDA and […] Bank, reached similar
granted by IDA at an interest rate of 6,81 %, calculated
conclusions with respect to the interest rates.
as the sum of the base rate (three month WIBOR
(3,81 %) plus 1,2 %) and the interest margin as it
resulted from the matrix re-produced in table 3, i.e.
1,8 %.
(51) Also,
as
a
general
remark,
Poland
submitted
that
in
view
of the high value of the loan at stake (PLN 150 million) it
is practically impossible to find an ideal benchmark on
the Polish market for the loan granted to Crist. With
(47) In
addition
to
the
calculations
by
IDA,
based
on
its
reference to the judgment of the Court of First Instance
internal rules, Poland submitted further clarifications
in Case T-296/97 Commission v. Alitalia, Poland argued
using the method for establishing a proxy set out in
that a possible gain by Crist should be assessed by
the Reference Rate Communication (see table 6).
reference to a similar and not an identical loan.
Table 6
(52) Poland
submitted
a
comparison
of
both
credits
(see
table
Loan margins in basis points according to the Reference
7 below) and recalled that both loans were granted in
Rate Communication
2010, that the […] Bank interest rate was even lower
(6,68 % compared to IDA’s 6,81 %) and that the […]
Collateralisation
Bank decision bore a higher risk. Consequently, in the
opinion of the Polish authorities that transaction
Rating category High Normal Low
constitutes a valuable point of reference.
Strong (AAA-A) 60 75 100
Good (BBB) 75 100 220
Table 7
Satisfactory (BB) 100 220 400
Comparison of […] Bank and IDA loans to Crist
Weak (B) 220 400 650
[…] Bank loan IDA
loan
Bad/Financial difficulties (CCC
400 650 1
000
and below)
Amount PLN
[…]
PLN 150 000 000
Date of granting 18.2.2010 14.9.2010
(48) Poland
submitted
that
taking
into
account
the
reference
rate published by the Commission for Poland (4,49 %),
Credit duration 3
years
10
months 5
years
3
months
Crist’s rating category (BB), and the high level of
collateral (see recital 44), the interest rate on the loan
Interest rate 6,62
% 6,81
%
should not be lower than 5,49 %. Poland therefore
stressed that the rate applied by IDA of 6,81 % is 132
Value of
PLN […] PLN
[…]
basis points higher than the reference rate defined in the
collateral
Reference Rate Communication, i.e. 5,49 %.

---

EN
16.1.2013 Official
Journal
of
the
European
Union L
12/45
[…] Bank loan IDA
loan
for businesses in PLN. It follows from that table that for
credits over PLN 4 million with an interest rate variability
Development
PLN […] PLN
[…]
not exceeding 3 months (as in the case of Crist), the
prospects ( 1 )
average interest rate equalled 5,4 %, i.e. lower than the
rate IDA charged Crist.
Additional risks Lack of certainty Loan granted for
that the dry dock the purchase of the
(Shipyard Area 2) dry dock (Shipyard
will be purchased Area 2) being a
and the production completion of the
3. The Business Plan
line will be
production line
complete
(56) The
Polish
authorities
provided
the
Commission
with
Crist's business plan ("the business plan"). Poland
( 1 ) The value of the contracts concluded at the moment of signing the
informed the Commission that prior to granting the
financing contract.
loan to Crist, IDA had consulted the commercial
partners of the company ([…] and […]) as well as
private banks, and received answers confirming the
financial stability of Crist. The Polish authorities
(53) As
regards
the
credit
risk,
Poland
noted
that
both
[…]
provided the Commission with these confirmation
Bank and IDA based their decisions on the same business
letters from private banks and also an analysis by […]
plan, which foresaw the purchase of both Shipyard Area
of the implementation of the business strategy by Crist
1 and 2. Therefore the risk of the completion of the
covering the period prior to IDA's decision to grant the
plant was higher before the first transaction took place
loan.
(even if […] Bank only refinanced the transaction which
Crist originally covered from its own resources). In fact,
the IDA loan decision allowing the purchase of the
Shipyard Area 2 ensured the completion of Crist's new
business strategy in which the company refocuses its
(57) The
business
plan
assumed
that
the
net
present
value
of
business activity from traditional shipbuilding to the
the investment project would amount to PLN […]
offshore renewable energy sector. In addition, Poland
million (EUR […]million) and the internal rate of
pointed out that the granting of the […] Bank credit
return would be […] %. These estimations took as an
to Crist occurred before Crist signed a very lucrative
assumption that the company would pay PLN 150
contract with Beluga Hochtief with the highest trans
million for the dry dock. In response to the observation
action value in Crist's history (of EUR […]million)
of the Commission in the opening decision that in the
which further improved the company’s creditworthiness
end the actual price paid was PLN 175 million, Poland
at the time of IDA’s loan decision.
submitted an analysis by […]. It shows that the NPV and
IRR of the investment amounts to PLN […]million and
[…] % respectively on the basis of knowledge available at
the time of transaction. […] adds that with the current
knowledge, the NPV and IRR correspond to PLN
[…]million and […] % respectively.
(54) On the other hand, the Polish authorities underlined that
at the moment of granting the loan there was additional
information that IDA gave serious consideration. For
instance, Poland pointed out that apart from IDA and
[…] Bank, Crist enjoyed positive and long-lasting
(58) The
same
report
contains
an
overview
of
the
market
relations with a number of other financial institutions
situation and the development prospects of Crist. The
providing finance for the company’s activities (
report notes that Crist changed its production profile

10 ). This
demonstrated Crist’s ability to raise finance on the
from traditional shipbuilding to tailor-made vessels,
capital market, at the time of the loan decision. To this
platforms and construction elements at sea. This
end, Poland submitted a list of credit and guarantee limits
business strategy gives Crist a niche position from
in individual financial institutions held by Crist at the
which to participate in planned offshore projects in the
time of the transaction.
North Sea and which provides ample opportunities for
dynamic growth. […] concludes that the company is
operating in a sector with significant growth potential.
(55) Finally,
the
Polish
authorities
drew
the
Commission’s
attention to the National Bank of Poland interest rate
(59) Poland
submitted
that
as
a
result
of
the
expert
analysis
of
table of September 2010 containing a periodically
the business plan IDA concluded that: despite the
published list of average interest rates for new loans
economic crisis in progress since 2008 the company
had recorded positive financial results for the last three
years, the value of the signed and negotiated contracts
( 10 ) Crist had been benefiting from a number of other external private
indicated a quick development of the company, the
sources of financing. They include credits and guarantees from […],
[…][…], […], […], […]and […] for over PLN […] million in 2010
financial forecasts were assessed positively and showed
and amounting to over PLN […] in 2011.
the company’s ability to repay the loan.

---

L 12/46
EN
Official Journal of the European Union
16.1.2013
(60) Finally,
the
Polish
authorities
observed
that,
with
a
net
favouring certain undertakings or the production of
profit of PLN 12,6 million (EUR 2,8 million) in 2010 and
certain goods shall, in so far as it affects trade between
PLN 31,6 million (EUR 7,03 million) in 2011, the
Member States, be incompatible with the internal market.
company generated a net result which exceeded
[…]times the figures foreseen in the business plan. Simi
larly, it was noted that the company’s total balance sheet
at the end of 2011 was higher than planned by around
(66) The classification of a national measure as State aid
[…] %.
presupposes that the following cumulative conditions
are met: (1) the measure confers an advantage through
State resources; (2) the advantage is selective; and (3) the
4. Preferential treatment of the company
measure distorts or threatens to distort competition and
is capable of affecting trade between Member States.
(61) As
regards
the
alleged
preferential
treatment
of
Crist
by
IDA, the Polish authorities explained first that the
company was eligible for Programme funds as Crist's
headquarters and two of its centres of business are
located in Gdask. The investment in Gdynia, which
1.1. Existence of an advantage
otherwise does not qualify for such funds, did not
(67) In
order
to
determine
whether
the
measure
under
inves
result in the company’s reallocation of activity but
tigation constitutes aid, it is necessary to establish
rather in a geographical extension of Crist's activity.
whether Crist received an economic advantage which it
would not have obtained under normal market
conditions, that is conditions on which a private
(62) With
regard
to
the
level
of
funding,
Poland
reaffirmed
investor would provide financing to Crist
that the level of financing of Crist’s investment from the
IDA fund did not exceed the 80 % cap foreseen in the
Programme. Poland stated that the total outlay of the
investment programme planned by the company was
T h e i n t e r e s t r a t e
PLN 188,2 million and encompassed Crist’s purchase of
not only the dry dock (Shipyard Area 2) but also the hull
(68) In
order
to
determine
whether
the
measure
under
exam
assemble area (Shipyard Area 1). Poland explained that
ination is compatible with the private investor test, the
both investments together belong to the same
Commission assessed whether, on the basis of the
production line which allowed Crist to target effectively
information available to IDA at the time the decision
the renewable energy and off-shore construction markets.
was taken, a private creditor would have granted Crist
Only the complete investment programme enabled Crist
a similar credit.
to change its business model from traditional ship
building to tailor-made vessels, platforms and
construction elements for off-shore wind farms.
(69) As
outlined
in
recital
33
and
following,
Poland
informed
the Commission that prior to the granting of the loan,
(63) Therefore
the
intensity
ratio
of
the
whole
investment
of
Crist was subject to a detailed assessment of its economic
Crist (PLN 213,2 million ( 11 ) to the IDA loan (PLN 150
and financial situation performed by IDA in cooperation
million) corresponds to 70 % and is well below the 80 %
with external experts, which led to the determination of
cap established by the Programme.
Crist’s rating. According to its internal system, IDA
qualified Crist’s rating as moderate, which, according to
Poland, corresponds at least to the category BB (satis
(64) Finally,
Poland
claimed
that
the
Programme
from
which
factory) for the purposes of applying the Reference
the loan for Crist was financed was a commercial
Rate Communication.
programme and not of an aid nature. Poland noted
that IDA’s decisions to finance certain projects are
assessed on a commercial basis by experts having
experience from the largest financial institutions in
(70) With
regard
to
the
collateral,
Poland
submitted
all
expert
Poland.
valuations and provided detailed explanations concerning
each of the elements constituting the loan’s collateral (see
recitals 39 to 45). On the basis of those valuations,
V. ASSESSMENT
which indicated that PLN […]million should be
retained as the value of the pledge on the shares and
1. Existence of State aid within the meaning of
an amount in excess of PLN […] million could be
Article 107(1) TFEU
attributed to the mortgage over the dry dock, and
bearing in mind the Programme condition that collateral
(65) Under
Article
107(1)
TFEU,
any
aid
granted
by
a
Member
should represent at least 150 % of the funding, the value
State or through State resources in any form whatsoever
of Crist’s collateral was qualified by IDA as moderate,
which distorts or threatens to distort competition by
providing good cover for the credit risk. Poland never
theless submitted that this constituted a prudent
( 11 ) This includes PLN 38,2 million for the Shipyard Area 1 and
approach and that the independent expert collateral valu
PLN 175 million for the Shipyard Area 2.
ations indicate the high value of the collateral.

---

EN
16.1.2013 Official
Journal
of
the
European
Union L
12/47
(71) Finally,
on
the
basis
of
the
moderate
level
of
risk
and
(75) On the company’s rating, the Commission critically
collateral, the loan by IDA was granted at an interest rate
assessed the contemporaneous evidence submitted by
of 6,81 %, calculated as a sum of the base rate (three
Poland, at the disposal of IDA prior to the decision to
month WIBOR plus 1,2 %) and an interest margin of
grant the loan. The Commission observes that within its
1,8 % (see table 3). Poland submitted that this rate
internal rating expert analysis IDA carried out the full
exceeded the minimum interest rate as it would be
ratio analysis of Crist covering the liquidity ratio,
calculated according to the Reference Rate Communi
turnover, asset-to capital structure and profitability
cation (see table 6 and recitals 46 to 49). The
ratios. In addition, IDA’s assessment covered such
Commission notes that while Poland uses 'high collat
elements as: cash flow analysis, financial forecasts,
eralisation' for its calculations, the statement holds true
investment effectiveness, break-even point, vulnerability
even if IDAs assessment of 'moderate' (or normal) collat
of the project to external factors such as interest rate
eralisation is applied: base rate plus 220 basis points or
or currency exchange rate.
6,69 %.
(76) The
Commission
also
takes
note
of
the
[…]
report.
(72) As
a
general
remark,
the
Commission
recalls
that
its
Although it post-dates the transaction, that report
preliminary doubts with regard to the interest rate
contains a detailed estimate of Crist’s credit rating and
level, contained in the opening decision, were primarily
the collateral on offer, on the basis of the same
due to the lack of evidence on the company’s rating and
information that IDA had at its disposal at the time of
the level of collateral. In that regard, the Commission
the granting of the loan. The report estimates Crist’s
notes that in the reply to the opening decision Poland
rating to be slightly lower than applied by IDA (BB-B
provided the relevant information, which IDA had at its
range). As regard the collateral, the report considers that
disposal prior to the granting of the loan. In addition,
[…] assets based valuation significantly underestimates
Poland submitted an ex post valuation of the mortgaged
the value of Crist equity. […] considers the APV
real estate and a report drawn up by […] after the fact
method to be more consistent and commonly used.
but based on the information available at the time the
[…] concludes on the basis of its analysis of Crist's
decision to grant the loan was taken.
rating and the value of the collateral on offer that the
interest rate on the IDA loan was not lower than a
market rate.
(73) As
regards
the
collateral,
the
Commission’s
assessment
focused on whether the expert valuations were done in
(77) The
Commission
also
analysed
whether
the
interest
rate
a conservative manner such that a private investor would
set by IDA corresponds to the methodology for setting
have accepted the collateral on offer. In this respect, the
reference rates, which the Commission can apply as a
Commission observes that, depending on the method
proxy for the market rate as contained in the Reference
used, the valuations of Crist’s shares differ significantly
Rate Communication. According to the Reference Rate
(see recital 40). The Commission also notes the criticism
Communication, the reference rate results from the
by […] as regards the net asset value valuation of PLN
addition of a margin to a base rate corresponding to
[…] million, which omits a number of important factors
the 1-year IBOR (the 1-year money market rate in the
(see recital 45), which in turn result in the underesti
Member State concerned). The margin to be applied
mation of the value of Crist equity. Finally, the
depends on the rating of the undertaking concerned
Commission observes that the valuations of both […]
and the collateral (see table 6).
and […] using the APV method arrive at the same
conclusion (i.e. valuation of ca. PLN […]million) and
that both independent experts are of