HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN"EN
19.10.2011 Official
Journal
of
the
European
Union
L
274/1
II
(Non-legislative acts)
DECISIONS
COMMISSION DECISION
of 20 April 2011
on suspected aid to the company Trèves C 4/10 (ex NN 64/09) implemented by the French Republic
(notified under document C(2011) 2585)
(Only the French text is authentic)
(Text with EEA relevance)
(2011/676/EU)
THE EUROPEAN COMMISSION,
8 January 2010. Following this meeting, the French
authorities provided additional information by e-mail
dated 15 January 2010.
Having regard to the Treaty on the Functioning of the European
Union, and in particular the first subparagraph of Article 108(2)
thereof,
(3) By
letter
dated
29
January
2010,
the
Commission
notified France of its decision to initiate the procedure
Having regard to the Agreement on the European Economic
laid down in Article 108(2) of the Treaty on the Func
Area, and in particular Article 62(1)(a) thereof,
tioning of the European Union (below: ‘TFEU’)
concerning the FMEA investment and a plan to
reschedule Trèves’ tax and social security debts (also
Having called on interested parties to submit their comments
referred to as the ‘debt settlement plan’) authorised by
pursuant to the provisions cited above (
the French administration. France communicated its

1 ) and having regard to
their comments,
comments concerning the initiation of the formal inves
tigation procedure on 25 March 2010.
Whereas:
(4) The
Commission’s
decision
to
initiate
the
procedure
was
I. PROCEDURE
published in the Official Journal of the European Union ( 2 ).
The Commission invited interested parties to submit their
(1) By
means
of
various
articles
appearing
in
the
press
in
comments on the measures in question.
spring 2009, it came to the Commission’s attention that
the company Trèves would appear to have benefited
from an investment amounting to EUR 55 million by
the Fonds de Modernisation des Equipementiers Auto
(5) The
Commission
received
comments
on
this
subject
mobiles (Fund for the Modernisation of Automobile
from the following interested parties: the Italian
Parts Manufacturers) (below: ‘FMEA’). The Commission
Republic, the company Trèves, the PSA Peugeot Citron
sent the French authorities requests for information on
group, the Renault group, one of Trèves’ competitors
this subject by letters dated 5 May 2009, 11 June 2009,
wishing to remain anonymous and the FMEA (
10 July 2009 and 4 November 2009. The French

3 ). The
Commission forwarded these comments to France,
authorities replied to these requests by letters (or
giving it the opportunity to comment on them, and
e-mails) dated 5 June 2009, 23 June 2009, 18 August
received its comments by letter dated 5 October 2010.
2009, 18 November 2009 and 23 December 2009.
A meeting was also held with the French authorities on
18 November 2010. Finally, additional information was
forwarded to the Commission by e-mails dated
(2)
Moreover, at the request of the French authorities, a
21 December 2010 and 22 February 2011.
meeting was held at the Commission’s offices on
( 2 ) See footnote 1.
( 1 ) OJ C 133, 22.5.2010, p. 12.
( 3 ) The comments of interested parties are summarised in Section III.

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L 274/2
EN
Official Journal of the European Union
19.10.2011
II. DESCRIPTION OF THE MEASURES UNDER
customers research and development capacity and strong
INVESTIGATION
international support. It makes investments of up to a
maximum of EUR 60 million, for the exclusive benefit of
(6) Before
describing
the
measures
under
investigation,
it
is
its subscribers, alone or together with other private
appropriate to present the Fonds Stratégique d’Investis
investors or other funds.
sement (Strategic Investment Fund) (below: ‘FSI’), the
FMEA and CDC Entreprises (the FMEA management
company) (point II.1 below) and the company Trèves
and the measures taken in relation to it (point II.2
below). Finally, the reasons will be set out leading to
(12) The
FMEA
was
established
(on
25
March
2009)
under
the plan to support the motor vehicle industry,
the initiation of the formal investigation procedure
announced by the President of the French Republic on
regarding the FMEA investment and the tax and social
4 December 2008. Its capital of EUR 600 million is
security debt rescheduling plan (point II.3 below).
funded by the FSI (EUR 200 million), PSA (EUR 200
million) and Renault (EUR 200 million).
II.1. The FSI, the FMEA and CDC Entreprises
(7) On
account
of
the
crisis
which
started
in
2008,
France (13) The
FMEA
is
managed
by
CDC
Entreprises,
a
subsidiary
established the Strategic Investment Fund (below: ‘FSI’) to
of the CDC. Investment decisions are therefore taken by
bolster its economy. Shortly afterwards, the FSI, in part
CDC Entreprises.
nership with the PSA Peugeot Citron group (below:
‘PSA’) and the Renault group (below: ‘Renault’), set up
the FMEA. Whereas the object of the FSI is to intervene
in any type of enterprise, whichever the economic sector
(14) The
FMEA
has
a
selection
committee
and
an
investment
concerned, the FMEA intervenes only in favour of auto
committee, which are responsible for preparing files
mobile parts manufacturers.
before investments are made by the management
company CDC Entreprises. The three investors, PSA,
Renault and the FSI, are represented equally on these
F S I
committees.
(8) The
Strategic
Investment
Fund,
with
capital
of
EUR
20
billion, was set up by the French Government in
December 2008 to meet the capital requirements of
(15) According to the FMEA organisational rules, the selection
undertakings deemed to boost the growth and competi
committee must be consulted by the management
tiveness of the French economy. According to its
company concerning the strategic nature of investment
managers, the FSI invests only in undertakings which
projects. Its advisory opinions are not binding on the
offer good prospects of growth and competitiveness for
management company. They are adopted by a
the French economy.
two-thirds majority.
(9)
The FSI is 49 % owned by the French Government and
(16) The
investment
committee
must
be
consulted
prior
to
51 % by the Caisse des Dépts et Consignations
each investment or divestment carried out or concerning
(below: ‘CDC’). The CDC ‘and its subsidiaries constitute
any derogation from the investment policy criteria and
a public group serving the general interest and economic
rules. When pronouncing on an investment or
development’ of France ( 4 ); its managers are appointed by
divestment project, its opinions too are adopted by a
decree.
two-thirds majority and are not binding on the
management company. However, if one of the three
investors votes against, the opinion given will be
(10) The FSI Board of Directors is chaired by the Director-
considered as a negative opinion. In this case, the
General of the CDC and, in addition to its Chairman,
investment or divestment project is returned to the
comprises six directors, of whom one represents the
selection committee.
CDC, two represent the State (the Director-General for
State Holdings and the Director-General for Enterprises)
and three represent the interests of undertakings (the
company directors of SCOR, Essilor and Artémis).
C D C E n t r e p r i s e s
(17) CDC
Entreprises
plays
a
key
role
in
venture
capital
in
France. It is required to comply with all the rules laid
F M E A
down by the Financial Markets Authority regarding third-
party asset management and especially the rules relating
(11) The FMEA is a venture capital mutual fund, the object of
to independence concerning choice of investments and
which is to promote the emergence of competitive auto
prevention of conflicts of interests. CDC Entreprises’
mobile parts manufacturers capable of offering their
management activities include FSI’s investments in
unlisted SMEs and investments on behalf of the CDC
( 4 ) Article L518-2 of the French Monetary and Financial Code.
and other investors.

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EN
19.10.2011 Official
Journal
of
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European
Union
L
274/3
(18) CDC Entreprises is a full subsidiary of the CDC. The Chairman and Managing Director of CDC
Entreprises are appointed by its Board of Directors, the members of which are appointed by the CDC.
(19) CDC Entreprises has concluded an assistance and advice agreement with the FSI, under which a
dedicated FSI team assists CDC Entreprises in preselection of investment projects (including feasibility
and risk assessment studies, study and assistance in the implementation of these interventions) and
monitoring the investments made.
(20) The organisation and functioning of the FMEA committees mean that CDC Entreprises alone has the
authority to commit the FMEA. The decisions taken by the committees are not binding on the
management company (apart from derogations from the investment policy criteria and rules and the
management of conflicts of interests, which are not relevant in the present case). The French
authorities specified that, to date, CDC Entreprises has never deemed it appropriate to take
investment decisions contrary to the opinion of the committees.
(21) Figure 1 below summarises the links between the French State, the CDC, CDC Entreprises, the FSI,
the FMEA, PSA and Renault.
Figure 1
Links between the French State, the CDC, CDC Entreprises, the FSI, the FMEA, PSA and Renault
II.2. The company Trèves and the measures taken in relation to it
(22) Trèves
is
a
company
specialising
in
car
interior
components.
Trèves
employed
about
6
500
persons
before the current restructuring plan was implemented (the restructuring plan concerns 1 300
persons). It is structured around three areas of activity: noise insulation ( 5 ), seats and components,
and textiles. The company owned 9 factories (2 have now been closed) and is established in 14
countries (including Spain, the United Kingdom, Portugal, Slovenia and the Czech Republic). 40 % of
its turnover comes from France. Its main customers are Renault, Peugeot SA, Volkswagen, Nissan and
Toyota.
( 5 ) Car Interiors and Acoustics, Carpets and Soundproofing (HAPP).

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L 274/4
EN
Official Journal of the European Union
19.10.2011
(23) Shortly
before
the
outbreak
of
the
crisis
in
2008,
Trèves
capital increase (subscription of new ordinary shares),
was starting to reap the benefits of a first restructuring
thereby providing the FMEA with a [< 50] % holding in
plan launched in 2005 aiming to reduce the workforce
Trèves’ capital.
and rationalise production capacity. When the crisis
arose, Trèves decided to modify and extend its restruc
turing plan and expressed the wish to conduct
discussions with its lenders under a conciliation
(30) The
public
creditors
authorised
a
tax
and
social
security
procedure (
debt settlement plan amounting to EUR 18,4 million

6 ).
[…]. This plan consists in rescheduling the repayment
of Trèves’ tax and social security debts, together with
the payment of penalties and interest on arrears.
(24) A
conciliation protocol was therefore concluded on
25 May 2009 between the Trèves shareholder (the
holding company ‘Severt’, the sole shareholder), the
companies of the Trèves group, the lenders (i.e. the
II.3. Reasons for initiating the procedure
banks) and the FMEA. This protocol is based on the
(31) The
financing
of
Trèves’
restructuring
plan
is
based
on
implementation of a restructuring plan (this plan is
the investment of new funds to a total of EUR [100-120]
described in Section V.1.1).
million (this amount does not include the consolidation
loan). Of this amount, EUR 55 million is contributed by
the FMEA. To this is added the tax and social security
debt settlement plan amounting to EUR 18,4 million. In
(25) The financing of the restructuring plan was estimated at
EUR [110-140] (*) million. Under this plan, the various
its decision to initiate the formal investigation procedure,
parties entered into the commitments described in the
the Commission expresses its doubts as to whether these
protocol of 25 May 2009.
latter two measures should not be categorised as State aid
within the meaning of Article 107(1) TFEU.
C o n t r i b u t i o n o f t h e c o m p a n y , i t s b a n k s
(32) As regards the FMEA investment, the Commission points
a n d i t s c u s t o m e r s
out that several factors seem to indicate that this
investment is of state origin. At first sight, this
(26) Manufacturers Peugeot and Renault committed to
contributing EUR 33,3 million under the financing […].
investment appears to have been made from state

resources and to be imputable to the State ( 7 ). The
Commission’s doubts are based in particular on obser
vation of the functioning of the FSI, the FMEA and CDC
(27) The
Trèves
group
committed
to
doing
its
utmost
to
Entreprises described above.
generate a sum during 2009 corresponding to [5-20] %
of the cash resource requirements, i.e. EUR [5-30]
million.
(33) The Commission then expresses its doubts about
compliance with the criterion of the private investor
operating in a market economy through this investment.
In particular, the Commission was unable to establish
(28) The
banks
granted
a
new
bank
loan
of
EUR
[10-30]
million. The banks also granted a consolidation loan
with certainty, in the light of the situation in both the
amounting to EUR [30-60] million to repay the
motor vehicle sector and the company which was experi
existing short-term loans (EUR [0-20] million) and
encing certain financial difficulties ( 8 ), firstly, that the
medium-term loans (EUR [30-40] million). The new
assumptions of the restructuring plan were credible,
loan and the consolidation loan must be repaid in full
realistic and prudent, secondly, that the valuation of
by […] 2014.
Trèves prior to the investment was prudent and,
thirdly, that the prospect of an internal rate of return
( 7 ) According to established case-law (see in particular the Court of
F M E A c o n t r i b u t i o n a n d p u b l i c c o n t r i b -
Justice judgment in Case C-305/89 Italy v Commission [1991] ECR
u t i o n
I-1603, paragraph 13), no distinction should be drawn between

cases where aid is granted directly by the State and cases where it
is granted by public or private bodies established or appointed by
(29) The
FMEA
invested
EUR
55
million
in
the
company.
Of
the State to administer the aid. European law cannot permit the rules
this sum, EUR [40-50] million was in the form of debt
on State aid to be circumvented merely through the creation of
securities providing access to capital (i.e. convertible
autonomous institutions charged with allocating aid. However, as
bonds with adjustable parity), bearing a fixed coupon
the Court affirmed in its judgment of 16 May 2002 (C-482/99
of [> 8] %. In parallel, EUR [5-15] million came from a
France v Commission, known as ‘Stardust Marine’, [2002] ECR
I-4397), for measures to be capable of being categorised as aid
within the meaning of Article 107(1) TFEU, they must, first, be
( 6 ) The purpose of the conciliation procedure is to conclude an
granted directly or indirectly through state resources and, second,
amicable agreement between a business manager and his creditors
be imputable to the State.
(public and private) with a view to establishing payment deadlines
( 8 ) Trèves’ financial difficulties at the end of 2008 were primarily a fall
and/or debt remission (Article 611-7 of the French Commercial
in turnover (EUR [650-700] million, i.e. [20-25] % compared with
Code).
2007) and a loss of EUR [40-50] million at the end of the financial
(*) Covered by business secrecy.
year.

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EN
19.10.2011 Official
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European
Union
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(below: ‘IRR’) of [> 12 %] ( 9 ) was to be considered
(38) Secondly, the Trèves group categorically
refutes the
sufficient in view of the risk assumed by the FMEA.
Commission’s analysis of the economic situation of the
company Trèves between 2005 and 2008. In its opinion,
the Commission confuses the general crisis in the motor
vehicle sector in 2008 with the individual situation of the
(34) As
regards
the
tax
and
social
security
debt
settlement
plan, the Commission wonders whether the French
company, which recorded an uninterrupted, substantial
authorities acted like a private creditor placed in the
increase in its turnover between 1999 (EUR [500-700]
same conditions and seeking to recover sums due to it.
million) and 2004 (EUR [900-1 100] million). This rise
The Commission was not in possession of all the
was in fact checked by the crisis which hit the motor
information enabling it to conclude that the public
vehicle sector in the second half of 2008. The object of
creditors, by virtue of the conciliation protocol of
the restructuring plans of 2005 and 2009 was not to
25 May 2009, were in a position at least as favourable
remedy liquidity problems, but consisted in rationalising
as Trèves’ private creditors (i.e. the banks) which also
the company’s production capacity in order to relaunch
agreed to reschedule their claims by granting a consoli
the company in a difficult economic climate and not to
dation loan. The Commission therefore expresses doubts
ensure its survival, as evidenced by the rising trend in
about compliance with the principle of the private
Trèves’ EBITDA ( 11 ) between 2005 and 2007 and the
creditor operating in a market economy through the
recovery in its results from 2009.
tax and social security debt settlement plan.
(39) Furthermore,
the
Trèves
group
challenges
the
importance
(35) Finally,
if
the
two
measures
mentioned
above
were
to
be
which the Commission attributes to the declarations by
categorised as State aid, the Commission points out in its
the French Minister for Industry that if the State had not
decision to initiate the procedure that their compatibility
intervened, Trèves would have filed a petition in bank
could be examined on the basis of the Commission
ruptcy. A subjective political declaration pronounced in a
guidelines on State aid for rescuing and restructuring
tense social climate has no relevance to the assessment of
firms in difficulty ( 10 ) (below: ‘the guidelines’). However,
the real economic and financial situation of an under
the Commission asserts that, at this stage, it is unable to
taking.
establish with certainty that all the conditions provided
for by the guidelines are met.
(40) Consequently, the FMEA investment in the company
Trèves was undeniably prudent, both financially and
III. COMMENTS FROM THIRD PARTIES
industrially. The company recalls that the FMEA was
not the only investor, but that several other potential
T h e T r è v e s g r o u p
investors came forward and private partners entered
into commitments alongside the FMEA. Contrary to
(36) The
Trèves
group
communicated
its
comments
to
the
Commission by letter dated 2 July 2010. In its
what the Commission seems to assume, there is no
opinion, the terms and conditions of the FMEA
contradiction between the financial logic and the
investment in the Trèves group and the implementation
industrial logic of the FMEA investment. According to
of the tax and social security debt rescheduling plan are
the Trèves group, the fact that a manufacturer holds a
not covered by Article 107(1) TFEU.
participating interest in one of its suppliers for the

purpose of strengthening their industrial ties and
obtaining a financial benefit from its growth is current
practice in the motor vehicle sector.
(37) Firstly,
the
Trèves
group
points
out
that
the
argument
of
the imputability of the aid to the State is unfounded
because, through the FMEA, the Trèves group opted for
a commitment with two motor vehicle manufacturers of
(41) Thirdly,
the
Trèves
group
pays
particular
attention
to
international dimension which account for [> 50] % of
compliance with the principle of the prudent investor
its turnover. Furthermore, it contests the Commission’s
operating in a market economy. The terms of the
analysis that the company had to call on state resources
investment are not only very strict, but also advan
as, on the one hand, the FMEA resources, in its view,
tageous for the FMEA. Furthermore, in 2008-09, the
come from private operators and, on the other hand, the
company Trèves had key strengths at its disposal to
participation of other private investors in the financing of
ensure its rapid return to profitability (establishment
the company (the banks), proves that it was capable of
and growth in emerging countries, diversification of its
financing itself on the market.
portfolio of manufacturer customers, marked focus on
research and development). Taking account of these
strengths, Trèves’ industrial and financial restructuring
( 9 ) In the decision to initiate the procedure, the IRR mentioned is
plan was drawn up on the basis of prudent and
[> 15 %]. This is explained as follows: the expected IRR from the
FMEA investment is [> 15 %]. However, to be on the safe side, the
reasonable forecasts after a detailed audit of the
FMEA applies a discount of […] % to the EBITDA (see footnote 11)
company’s situation. Finally, the good results recorded
of the financial year 2011. After discount, the IRR is [> 12 %],
by Trèves in 2009-10 demonstrate the prudent nature
which is used as reference rate of return in this decision. The
of the investment.
IRR of [> 15 %] mentioned in the decision to initiate the
procedure was an average rate: between the rate of [> 15 %]
without discount and the rate of [> 12 %] with discount.
( 11 ) Abbreviation for ‘earnings before interest, taxes, depreciation, and
( 10 ) OJ C 244, 1.10.2004, p. 2.
amortisation’.

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L 274/6
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Official Journal of the European Union
19.10.2011
(42) Finally,
the
Trèves
group
considers
that,
if
the
FMEA
of interest to […] other private funds. The distinct
investment were to come under Article 107(1) TFEU,
improvement in the company’s results from 2010
this aid would be compatible with the guidelines, as
shows the reality and relevance of the restructuring
the company’s long-term return to viability is ensured
plan presented by Trèves. The temporary difficulties
and the restructuring of Trèves does not give rise to
experienced by the company on account of the
any distortion of competition and is accompanied by
economic and financial crisis also enabled the FMEA to
compensatory measures already implemented in part
negotiate an investment on terms providing a very high
([…], reduction in production capacity, reduction in
level of protection.
workforce and finally the share in funding the restruc
turing of Trèves allegedly of state origin remains confined
to the strict minimum of the restructuring costs).
(47) The FMEA consequently considers that its investment
cannot be categorised as State aid.
(43) As
regards
the
tax
and
social
security
debt
rescheduling
plan, the Trèves group considers firstly that it respects
T h e R e n a u l t g r o u p
the principles of the private creditor operating in a
market economy and that the Commission cannot
(48) Renault
forwarded
its
comments
to
the
Commission
by
presuppose that any categorisation as aid adopted
letter dated 6 July 2010. First of all, it challenges the
would in fact preclude the possibility of a prudent
Commission’s assertions that its subscription to the
rescheduling plan on the part of the financial authorities.
FMEA is linked to the loan granted to it by the State
The rescheduling plan provides for penalties and
in April 2009. The company recalls that when the Fund
surcharges for late payment, an interest rate higher
was set up on 20 January 2009 ( 12 ), it had no
than the statutory rate which a private creditor could
information about a possible future loan granted by
expect, first-ranking mortgages […] and the co-
the State to manufacturers. The object of the loan
existence of the intervention by the public authorities
granted to it in April 2009 was to finance the general
with that of private creditors.
needs of the undertaking arising from the contraction in
the financial markets during the fourth quarter of 2008
and the first quarter of 2009.
T h e F M E A
(44) The
FMEA
forwarded
its
comments
to
the
Commission
(49) Furthermore,
Renault’s
subscription
to
the
FMEA
was
by letter dated 22 June 2010. The FMEA rejects the
justified for economic, industrial and financial reasons:
categorisation of its investment in the company Trèves
it is in fact strategically and financially essential for
as State aid, on account of its autonomy firstly in the
Renault to consolidate its supply on a permanent basis
choice of its investments and secondly in the approach
by relying on sound, competitive suppliers, while at the
adopted to achieve its objectives.
same time expecting a return on its financial investment.
The FMEA in this way enables Renault to invest in under
takings which are absolutely essential for the sector, such
(45) The
FMEA emphasises the fact that its intervention
as Trèves, which remains a key supplier for the European
decisions are entirely independent. This autonomy
motor vehicle industry. Consequently, the FMEA inter
results not only from its status, but also from its
ventions follow the same approach as that adopted by
governance. The FMEA, as a venture capital mutual
Renault, which is itself a prudent investor operating in a
fund, has a management company which in turn is
market economy.
subject to the rules of third-party asset management.
The statutory independence of the management
company in the choice of its investments, as it acts in
(50) Finally, Renault unreservedly endorses the FMEA’s
accordance with the proprietary interest of the
comments, presented in response to the Commission’s
subscribers, contributes to ensuring the autonomy of
decision to initiate the formal investigation procedure,
the FMEA at the investment decision stage. As regards
on its role in the governance of the FMEA, how the
the FMEA advisory committees, the opinions of the
FMEA operates, its autonomy and that of its
selection committee and the investment committee can
management company in relation to the public
be adopted only with the approval of one of the two
authorities.
manufacturers. The management company, CDC Entre
prises, has so far never departed from the opinions given
by the committees. Consequently, the influence of the
T h e P e u g e o t g r o u p
private investors, i.e. Renault and Peugeot, is
predominant in the selection and definition of the
(51) PSA
forwarded
its
comments
to
the
Commission
by
investment projects.
letter dated 6 July 2010. According to PSA, the FMEA
investment in Trèves is not only profitable, but also in
keeping with its economic and strategic interests.
(46) Moreover,
the
FMEA
investment
in
Trèves
illustrates
the
FMEA investment policy, which gives preference to
( 12 ) It should be recalled here that the FMEA was legally established
undertakings with strong innovative capacity and
only on 25 March 2009, the date of signature of the rules
strong potential for growth and profitability in the auto
governing the Fund by the subscribers and the date of the
subscription of the first tranche by these investors. In fact,
mobile parts manufacturers sector. Trèves is a leading
however, the Fund started work at the end of January while its
European parts manufacturer which for that matter was
establishment was still in progress.

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the
European
Union
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(52) PSA’s
participation
in
the
FMEA
is
part
of
the
joint
wish
(57) In their opinion, the terms and conditions of the FMEA
of the manufacturer and the Fund to invest in strategic
investment in Trèves do not fall within the scope of
undertakings with strong innovative capacity, capable of
Article 107(1) TFEU, as the investment was not
ensuring security of supply and optimum consolidation
financed by state resources, but by funds of
of the automobile parts manufacturers sector.
predominantly private origin and not imputable to the
Furthermore, PSA considers that the FMEA investment
State. Even if the FMEA resources were to be considered
meets its profitability requirements in the light of the
state resources or the investment decision were to be
risk assumed.
imputable to the State, the French authorities consider
that this investment displays all the characteristics of a
prudent investment in a market economy. Furthermore,
they also consider that the rescheduling of the tax and
(53) Finally, PSA emphasises the lack of conditionality
social security debt authorised by the public creditors
between its decision to participate in the FMEA and
meets the criteria of the private creditor seeking to
the conclusion of a loan agreement for EUR 3 billion
recover the sums due to it.
between the French State and the manufacturer in
March 2009.
(58) The French authorities point out that the FMEA
investment in no way involved the transfer of state
O n e o f T r è v e s ’ c o m p e t i t o r s
resources within the meaning of the ‘Stardust Marine’
case-law ( 14 ). Concerning the share of the manufacturers
(54) By
letter
dated
23
June
2010,
one
of
Trèves’
competitors,
PSA and Renault (2/3), the FMEA funds are purely
which wishes to remain anonymous, forwarded its
private; concerning the share of the FSI (1/3), these
comments to the Commission. This competitor
funds, although public in origin, are not under the
endorses the Commission analyses described in the
permanent control of the State. The FSI, created
decision to initiate the procedure of 29 January 2010.
according to the private investment fund model, is
It considers in fact that Trèves was experiencing
constituted in the form of a joint stock company
economic difficulties before the start of the economic
(société anonyme) in competition with other private
crisis and therefore is not eligible to benefit from
investment funds. It makes long-term investments with
measures under the temporary Community framework.
profitability as their objective.
Moreover, irrespective of Trèves’ economic situation, the
State aid from which it could benefit must be accom
panied by substantial compensatory measures, on
account of the very significant negative effects on
(59) Furthermore,
on
account
of
its
status
and
operating
competition. In fact aid with the sole aim of maintaining
procedures, the FMEA management company, CDC
an undertaking artificially in existence in a sector experi
Entreprises, is not under the surveillance of the public
encing long-term structural overcapacity is unjustified. It
authorities. On account of its status, it is legally inde
considers that Trèves should be obliged to limit its
pendent of the CDC and invests for the exclusive benefit
presence on the markets by selling subsidiaries or by
of its subscribers, in competition or together with private
reducing its activities drastically and contributing more
investors. CDC Entreprises therefore manages FMEA’s
from its own resources to its restructuring.
funds entirely independently. As regards the investment
in Trèves, it followed the FMEA selection and investment
committee recommendations without any state inter
vention. Consequently, the French authorities conclude
T h e I t a l i a n R e p u b l i c
on the one hand that the resources invested are not
state resources in so far as they are not constantly
(55) The
Italian
Ministry
of
Economic
Development
forwarded
under public control and therefore available to the
its comments to the Commission by letter dated 15 June
national authorities and, on the other hand, that the
2010. It endorses the Commission’s ‘arguments’ ( 13 ) on
decision to invest is not imputable to the State as CDC
two fundamental points: the FMEA investment is
Entreprises is acting only in the exclusive interest of the
undoubtedly State aid on account of the decisive
FMEA subscribers and totally independently.
presence of public funds and this type of aid is
intended to support undertakings which, before the
second quarter of 2008, were encountering difficulties
within the meaning of the guidelines.
(60) As regards the conformity of the FMEA investment with
the principle of the prudent investor operating in a
market economy, the French authorities recall that
FMEA’s investment policy gives preference to viable
IV. COMMENTS FROM FRANCE
projects of strategic interest to the motor vehicle
sector, with strong growth and strong innovative
(56) By
letter
dated
25
March
2010,
the
French
authorities
capacity. In the case of Trèves, the investment was
forwarded their comments to the Commission in
made on the basis of a realistic, rigorous business plan,
response to the initiation of the formal investigation
validated by several private analysts. In addition, the
procedure on 29 January 2010.
acquisition of the FMEA’s participating interest in
( 13 ) It should be recalled here that, in its decision to initiate the
( 14 ) Court of Justice judgment in Case C-482/99 French Republic v
procedure, the Commission confines itself to expressing doubts.
Commission [2002]ECR I-4397.

---

L 274/8
EN
Official Journal of the European Union
19.10.2011
Trèves’ capital and the subscription to convertible bonds
(65) Still according to the French authorities, the company
with adjustable parity occurred at the same time as other
competing with Trèves also presumes, without proving
private investments and under the same conditions (‘pari
it, the existence of State aid which would be incom
passu’ investments). According to the French authorities,
patible with the guidelines and with the temporary
these factors are sufficient to establish that the
framework adopted by the Commission in December
investment is in conformity with market practices.
2008 in the context of the economic and financial
crisis. The factors relied upon by this company are
either entirely inaccurate or taken out of context and
therefore interpreted in an erroneous and biased manner.
(61) As regards the application of the principle of the private
creditor operating in a market economy, the French
authorities consider that authorisation of Trèves’ tax
and social security debt rescheduling plan is in keeping
V. ASSESSMENT OF THE MEASURES UNDER INVESTI
with the idea underlying the application of this criterion,
GATION
i.e. that the public creditor, like the private creditor, must
seek to recover the sums due to it by a debtor experi
(66) When
the
Commission
investigates
a
national
measure,
it
encing financial difficulties. The French authorities specify
must first examine whether this measure can be
firstly that no remission of tax or social security debts
categorised as State aid within the meaning of
was granted to the Trèves group. They consider that the
Article 107(1) TFEU. Once this categorisation has been
two basic elements allowing the assessment of the private
established, the Commission can then assess the extent to
creditor principle, i.e. the presence of penalties and
which this measure can be considered compatible with
supplements for late payment and the interest rate
the common market on the basis of the derogations
charged, are observed in this case. In fact, the resche
permitted by the TFEU to the principle of prohibition
duling plan provides for interest and penalties for late
of State aid. If the measure under investigation does
payment, defined prior to the agreement on the resche
not constitute State aid, the examination of the compati
duling plan and taken into account in the calculation of
bility of the aid is not applicable.
the monthly instalments payable by Trèves. Furthermore,
this is in accordance with Article 1153 of the Civil Code,
which provides that, in the absence of a contractual term,
lateness in payment of a sum due to a private creditor
gives rise to the imposition of the payment of interest on
V.1. Evaluation of the presence of State aid within
arrears at the statutory rate. This rate was 3,79 % in
the meaning of Article 107(1) TFEU
2009, the year when the rescheduling plan was drawn
(67) Article
107(1)
of
the
TFEU
provides
that:
‘any
aid
granted
up. The annual interest over the total duration of the
by a Member State or through State resources in any
rescheduling plan is approximately [5-10] %. In the alter
form whatsoever which distorts or threatens to distort
native, the French authorities recall that, at the same time
competition by favouring certain undertakings or the
as the tax and social security debt rescheduling plan, the
production of certain goods shall, in so far as it affects
lending banks of the Trèves group granted a rescheduling
trade between Member States, be incompatible with the
of their own liabilities through a consolidation loan.
internal market.’
Trèves’ private creditors therefore also granted payment
facilities to ensure the repayment of their claims.
(68) This
provision
mentions
the
criteria
according
to
which
a
(62) The
French
authorities
find
firstly
that
the
majority
of
the
national measure can be categorised as State aid. As the
comments received confirm that the FMEA investment in
Court of Justice recalls in its judgment of 15 June 2006,
Trèves cannot be categorised as State aid. Consequently,
these criteria are ‘the financing of that measure by the
the French authorities will make no further comments on
State or through State resources, the existence of a
this subject.
benefit for an undertaking, the selective nature of the
said measure, and its effect on trade between Member
States and the distortion of competition resulting
therefrom’ ( 15 ).
(63) On
the
other
hand,
concerning
the
comments
presented
by the Italian authorities and the anonymous company
presenting itself as one of Trèves’ competitors, the French
authorities wish to communicate the following
(69) These
criteria
are
cumulative
and
must
therefore
all
be
comments to the Commission.
satisfied in order for it to be possible to categorise a
measure as State aid. Consequently, as soon as the
Commission establishes that one of these criteria is not
satisfied, it can assert with certainty that the measure
(64) The
French
authorities
find
that
the
Italian
authorities
under investigation does not constitute State aid within
confine themselves to asserting that the FMEA
the meaning of Article 107(1) TFEU.
investment in Trèves must be categorised as State aid
on account of the ‘decisive role’ played by public
( 15 ) Court of Justice judgment of 15 June 2006 in Joined Cases
resources. This assertion is not substantiated by any
C-393/04 and C-41/05 Air Liquide Industries Belgium [2006] ECR
demonstration or justification.
I-5293, paragraph 28.

---

EN
19.10.2011 Official
Journal
of
the
European
Union
L
274/9
V.1.1. The FMEA investment of EUR 55 million
(74) The
Commission
will
add
considerations
relating
to
the
structure of the FMEA investment and the sharing of the
(70) As
regards
the
FMEA
investment
in
Trèves
amounting
to
capital gain to the replies to questions b) and d)
EUR 55 million, it should first be verified whether the
respectively.
criterion of benefit is met.
B e n e f i t
(75) The
replies
given
to
these
questions
will
enable
the
Commission to determine whether the FMEA acted
(71) According
to
settled
case-law
( 16 ), a contribution of funds
under similar conditions to those that a private
to an undertaking does not constitute State aid if this
investor would have required whose investment
contribution is made in circumstances which would be
presents a risk arising from both the situation in the
acceptable for a private investor operating in the normal
motor vehicle sector at the time of the investment and
conditions of a market economy (‘criterion of private
that of the undertaking which was experiencing certain
investor operating in a market economy’).
financial difficulties.
(72) In
this
respect,
assuming
that
the
FMEA
will
sell
its
participating interest in Trèves during 2012, the
C o n c e r n i n g t h e c r e d i b l e a n d r e a l i s t i c
internal rate of return (‘IRR’) calculated by the FMEA
n a t u r e o f t h e r e s t r u c t u r i n g p l a n
on the basis of its investment is [> 12 %] per year.
This rate represents the pre-tax rate of return on the
(76) As
already
indicated
in
recital
23,
shortly
before
the
entire FMEA investment, i.e. both the direct capital
outbreak of the financial and economic crisis of 2008,
injection of EUR [5-15] million and the contribution in
Trèves was starting to reap the benefits of a first restruc
the form of debt securities giving access to capital
turing plan, launched in 2005, aiming to cut the
(convertible bonds with adjustable parity) amounting to
workforce and to rationalise production capacity ( 17 ).
EUR [40-50] million.
When the crisis occurred, Trèves decided to modify
and intensify its restructuring plan.
(73) Consequently,
with a view
to assessing
whether
the
criterion of the private investor operating in a market
economy is respected, the Commission must reach a
(77) In
this
way,
from
the
end
of
summer
2008,
Trèves
gave
decision on the following questions:
fresh impetus to its restructuring plan and at the end of
December 2008, i.e. several months before the
conciliation protocol of 25 May 2009, the following
(a) Is Trèves’ restructuring plan, the basis for the FMEA’s
results could already be observed:
commitment, credible and realistic?
(b) Was the Trèves group valued appropriately before the
— a significant reduction in overhead costs: the
FMEA capital injection of EUR [5-15] million?
measures taken in this respect allowed a reduction
of [20-30] % in the total amount of Trèves’ actual
overhead costs in the last 4 months of 2008
(c) Were the assumptions of the restructuring plan
compared with the 2008 budget forecast,
underlying the IRR reasonable and realistic at the
time of the FMEA investment?
— a hefty reduction in stocks: the cost of stocks fell by
(d) Is an expected IRR of [> 12 %] sufficient?
[30-40] % during the second half of 2008, from
EUR [20-80] million in June to EUR [0-60] million
in December,
( 16 ) According to the General Court, ‘it is necessary to determine
whether, in similar circumstances, a private investor of a
dimension comparable to that of the bodies managing the public
sector could have been prevailed upon to make capital
— control of tangible investments: these were reduced
contributions of the same size, having regard in particular to the
information available and foreseeable developments at the date of
by [40-50] % in 2008 compared with the 2008
those contributions. In addition, although the conduct of a private
budget forecast,
investor with which the intervention of the public investor pursuing
economic policy aims must be compared need not be the conduct
of an ordinary investor laying out capital with a view to realising a
profit in the relatively short term, it must at least be the conduct of
— a cut in the workforce: the group’s workforce in
a private holding company or a private group of undertakings
France was cut by [10-20] % during 2008 alone
pursuing a structural policy – whether general or sectoral – and
([…] employees in France in December 2008
guided by prospects of profitability in the longer term’, General
compared with […] employees in January 2008).
Court judgment of 21 May 2010 in Joined Cases T-425/04,
T-444/04, T-450/04 and T-456/04 France and others v Commission,
not yet reported paragraph 216. See also the following Commission
( 17 ) In fact, following a fall of [6-8] % between 2005 (EUR [900-950]
communications: Application of Articles 87 and 88 of the EC
million) and 2006 (EUR [800-850] million), Trèves’ turnover
Treaty to public authorities’ holdings, EC Bulletin No 9-1984;
recovered by [4-7] % from 2007 (EUR [850-900] million). Its
Commission Communication to the Member States. Application
profitability also recovered significantly since its EBITDA rose to
of Articles 87 and 88 of the EC Treaty and Article 5 of
EUR [50-60] million in 2007, or by […] % compared with 2006
Commission Directive 80/723/EEC to public undertakings in the
(EUR [30-40] million) and by […] % compared with 2005 (EUR
manufacturing sector (OJ C 307, 13.11.1993, p. 3).
[40-50] million).

---

L 274/10
EN
Official Journal of the European Union
19.10.2011
(78) At
the
beginning
of
2009,
Trèves
then
drew
up
more
(84) In the light of the factors above, the Commission
formally a new version of the restructuring plan, with the
concludes that the restructuring plan on which the
assistance of the independent consultancy firm […]. This
FMEA based its investment in Trèves can be considered
firm in particular confirmed the amount of cash resource
credible and realistic.
requirements considered necessary to finance the plan
(EUR [110-140] million, see recitals 25 et seq.).
R e g a r d i n g
t h e
v a l u a t i o n
o f
T r è v e s
(79) Firstly,
it
must
be
stressed
that
the
forecasts
for
future
b e f o r e t h e F M E A i n v e s t m e n t a n d t h e
turnover appearing in the restructuring plan seem to be
s t r u c t u r e o f t h i s i n v e s t m e n t
credible and realistic. In fact, the estimate of orders from
manufacturers on which these forecasts are based had
(85) Trèves’
equity
prior
to
the
FMEA
investment
was
valued
been revised substantially downwards. For example, the
at EUR [15-40] million. On this basis, the FMEA acquired
volumes expected for 2009 are [15-25] % below their
[< 50] % of Trèves’ equity through a capital increase of
2008 level. On the other hand, the forecasts are
EUR [5-15] million. The Commission has to check that
consistent with those drawn up at the same time by
this valuation is appropriate and prudent in the light of
motor vehicle sector analysts (the company JD Power,
the situation of the undertaking at the time.
for example) concerning the expected recovery of the
sector and its configuration by the year 2011. Trèves
therefore estimated its future turnover on the basis of a
prudent, sound estimate of volumes. The plan remains
(86) Several methods exist for estimating the value of the
prudent concerning the trend in the sector and counts on
equity of an undertaking ( 19 ). One method often used is
a level of activity in 2011 […] than the sales recorded in
that of the multiple of the EBITDA. It allows the value of
2008.
the equity of an undertaking for year X to be assessed by
multiplying the EBITDA of year X by a factor (the
multiple) considered to be appropriate for the sector
(80) Secondly, the plan introduces a significant reduction in
and subtracting the net debt from the result.
costs. This reduction is achieved, inter alia, by boosting
the efficiency of the workforce and by cutting operating
costs […] ( 18 ) […]. The reduction in costs is also based
on a sizeable reduction in the workforce (the restruc
(87) Another
method
is
discounted
cash
flow
analysis.
The
turing involves a total of 1 300 persons).
undertaking’s nominal free cash flows for the coming
years are discounted at the weighted average cost of
capital, or WACC) and the net debt is subtracted from
(81) On the basis of these measures, the restructuring plan
the value obtained.
provides for:
— a return to breakeven from 2010, with a pre-tax
(88) A
third
method
is
that
of
the
multiple
of
turnover.
It
result of EUR [0-10] million, a positive cash flow
allows the value of an undertaking’s equity in year X to
of EUR [0-10] million and an EBITDA of EUR
be assessed by multiplying the turnover of year X by a
[40-70] million,
factor (the multiple) considered to be appropriate for the
sector and subtracting the net debt from the result.
— a pre-tax result of EUR [10-30] million from 2011,
with a cash flow of EUR [10-30] million and an
(89) To
value
the
company
Trèves
prior
to
its
investment,
the
EBITDA of EUR [50-80] million.
FMEA used the discounted cash flow analysis and the
multiple of turnover methods. In fact, since Trèves did
not have a positive EBITDA at the end of 2008, the first
(82) It
should
be
noted
that,
before
committing
itself,
the
method mentioned, i.e. the multiple of the EBITDA, was
FMEA itself instructed the firm […] to conduct a full
not practicable.
audit, between mid-March and end-April 2009, of
Trèves’ situation (due diligence exercises). The FMEA
teams themselves also analysed and confirmed the
restructuring plan.
(90) On the other hand, the method of the discounted cash
flow analysis was possible and allowed the prospects of
return to profitability to be taken into account, which
(83) Moreover,
in
the
context
of
its
restructuring,
Trèves
results in the integration in the valuation of the beneficial
undertakes to dispose of its ‘[…]’ activity, taking into
effects expected from the improvement in the
account the industrial and social balances relating to
performance of the undertaking. The multiple of
this operation and seeking to contribute to the competi
turnover method was also used as a precaution and for
tiveness of the industrial plant and processes of the new
confirmation.
Trèves group.
( 19 ) By definition, the value of the equity of an undertaking is equal to
( 18 ) […].
the value of the undertaking minus the net debt.

---

EN
19.10.2011 Official
Journal
of
the
European
Union L
274/11
(91) As regards the method of the discounted cash flow
through the issue of new Trèves company shares. The
analysis of the undertaking, the sectoral capital cost or
parity is determined in 2011 by attaining a gross
WACC, integrating the specific sectoral risk, was
operating surplus margin of […] %. If this threshold is
estimated at 12 %. The FMEA then calculated a more
reached, the FMEA will obtain […] % of the equity by
prudent WACC of [> 12] % by integrating the additional
redeeming bonds. If this threshold is not reached,
specific risk premiums associated with the dimension of
redemption of the bonds would lead to the FMEA
the undertaking and the non-liquid nature of the
holding […] % of equity. It is therefore in the interests
investment. It finally adopted a WACC of [> 12] % to
of the Trèves managers to ensure that this gross
take account of the additional risk associated with the
operating surplus margin is achieved […]. There is
turnaround (i.e. restructuring) of the undertaking. The
therefore strong convergence in the interests of the
long-term value of the undertaking (known as the
financial investor and those of the manager shareholders
terminal value) is calculated on the basis of the 2011
in maximising the value of the company on exit.
results. The FMEA therefore established the value of the
equity of the Trèves group at EUR [15-40] million.
R e g a r d i n g t h e a s s u m p t i o n s j u s t i f y i n g a n
(92) As regards the multiple of turnover method, the multiple
I R R o f [ > 1 2 % ]
adopted and applied to the end-2008 turnover was [0-1].
This multiple corresponds to the multiples observed on
(96) The
approach
generally
adopted
by
a
private
investor
consists in assessing the annual internal rate of return
the market for comparable undertakings at the time of
arising from the investment project under consideration.
the transaction. It should be pointed out that in late
With a view to calculating the annual IRR of an
2008 and early 2009, these multiples reached historically
investment in an undertaking, it is appropriate to
low levels on account of the financial and economic
determine the value of the equity of this undertaking at
crisis which greatly affected the motor vehicle manufac
the time when the profitability is expected.
turing sector and the automobile parts manufacturers (in

fact the long-term average of the multiple of turnover for
the automobile parts manufacturers is set at 0,51). On
the basis of a multiple of [0-1], the value of Trèves’
(97) As
has
already
been
indicated
in
recitals
85
to
87,
several
equity stands at EUR [15-40] million.
methods are available for determining the value of an
undertaking. To assess the value of the undertaking
prevailing in 2012, the year when the FMEA could
(93) Therefore,
even
though
the
multiple
of
[0-1]
is
a
multiple
dispose of its participation ( 20 ), the FMEA used the
which has to be considered to be historically weak, the
method of the multiple of the EBITDA. This method is
FMEA adopted the value based on this multiple and not
often used in the industrial sector with a view to
that resulting from an average long-term multiple or a
providing for the exit terms for a capital or quasi-
multiple smoothed over several years. Likewise, the
capital investor. Furthermore, by calculating the
FMEA did not adopt the valuation resulting from the
expected return on the basis of the EBITDA, the FMEA
discounted cash flow analysis either. As a result of the
takes as a basis a pertinent measure for the recovery of
above, the valuation of Trèves’ equity before the FMEA
the undertaking which must be achieved between its
made its investment is appropriate and prudent. It is in
investment (25 May 2009) and the end of 2011. In
fact at the low end of the interval calculated according to
addition, by adopting the EBITDA forecasted for 2011
the discounted cash flow analysis method and the stock
and not the – higher – EBITDA forecasted for 2012, the
market multiples. A valuation undertaken in this context
FMEA adopts a prudent approach consisting of verifying
is a favourable factor for the private investor, as it tends
that the undertaking is making a satisfactory recovery in
to strengthen the prospects of a capital gain in the
a reasonably short period (just over 2 years).
perspective of valuation multiples returning to their
average historical levels.
(98) Consequently, in the case in point, the IRR calculated by
(94) Furthermore, it should be recalled that the FMEA
the FMEA is based on three assumptions mentioned in
investment is not confined to a capital contribution of
the restructuring plan. Firstly, the Trèves group should
EUR [5-15] million providing it with [< 50] % of the
achieve an EBITDA of EUR [50-80] million at the end of
Trèves group shares. The FMEA also contributed EUR
2011. Secondly, the value of Trèves at the end of 2011 is
[40-50] million in the form of debt securities giving
determined on the basis of a multiple of the EBlTDA of
access to capital (convertible bonds with adjustable
[1-6]. Thirdly, the net debt is estimated at EUR [50-150]
parity), bearing interest of [> 8] % p.a. This is a sophis
million at the end of 2011. The Commission must in
ticated structure which a private investor would have
this way determine whether these three assumptions are
demanded in a sector such as the motor vehicle subcon
to be considered as credible and realistic at the time
tracting sector. In fact, the presence of a significant
when the FMEA investment was made.
quantity of convertible bonds, with parity varying in
accordance with the performance of the company, is
( 20 ) The potential disposal by the FMEA of its holding in 2012 is a
one of the control mechanisms with the greatest
working hypothesis with a view to assessing the return on the
possible incentive effect.
investment as it would stand in 2012, on the basis of the 2011
results. According to the shareholder agreement, the FMEA is totally
free to retain or dispose of its holding in the first […] years of its
investment. […] Furthermore, be that as it may, the sharing of the
(95) The mechanism put in place by the FMEA is the
capital gain in the event of possible disposal of the company is
following. The convertible bonds can be redeemed
favourable to the FMEA (see recitals 110 and 111 of this Decision).

---

L 274/12
EN
Official Journal of the European Union
19.10.2011
(99) Firstly,
as
regards
the
EBITDA
value
for
2011,
it
should
purposes of the present analysis is an IRR resulting from
be emphasised that this forecast is based on the imple
a pessimistic scenario regarding the development of the
mentation of the restructuring plan. As explained in
undertaking. In fact, as has already been indicated, the
recitals 76 et seq., this plan can be considered to be
base scenario results in an IRR of [> 15 %] whereas an
credible and realistic. Therefore, it should be recalled
optimistic scenario (EBITDA exceeded by […] %) results
that the reduction in costs is primarily implemented by
in an IRR in the region of [> 20 %].
boosting labour efficiency and cutting operating costs
thanks, in particular, […]. The reduction in costs is
also based on a sizeable reduction in the workforce
(the restructuring involves a total of 1 300 persons).
(105) At present, it should be pointed out that, in view of the

non-liquid nature of the transaction, it is not possible to
refer to comparable quoted prices (for example for subor
dinated loans) at the time of the FMEA investment to
(100) Secondly, the EBlTDA multiple used ([1-6]) to determine
assess whether the level of the forecasted IRR is appro
the value of the undertaking corresponds to the average
priate. On the other hand, several factors presented
multiple for the sector calculated over the period
below allow the ‘minimum’ IRR of [> 12 %] adopted
2000-09 ([1-6]), minus, as a precaution, the standard
by the FMEA in May 2009 to be assessed.
deviation associated with the context of the turnaround
of the company. This multiple is slightly higher than the
multiple of the sector at the time of the investment
(about 4,2). Nevertheless, it is sufficiently prudent to
(106) It should be pointed out firstly that the returns on
take a figure of [1-6] as a basis for the valuation at
investment observed in the automobile subcontracting
the end of 2011, in view of the foreseeable recovery in
sector are often low. In fact, in the 5 years before the
the ratio, and for that matter this recovery already having
crisis of the second half of 2008, the average IRR
made a good start at the time of the investment ([1-6] in
amounted to 8,5
%
( 21 ). Nevertheless, professional
December 2008 as opposed to [1-6] in May 2009). This
investors have often invested in this sector, aware of
multiple also seems to be particularly prudent in the light
the potential gain linked to the low valuation of the
of the long-term forecasts for the sector indicating
undertakings in this sector [compared with other
multiples of between [1-6] and [1-6].
sectors]. In this way, in 2006, exceptional IRRs were to

be found (exceeding 20 % per year over 3 years) for
investors having invested during the market trough in
2003.
(101) Thirdly, the forecasts drawn up in April 2009 showed an
improvement in the net debt, which was to fall from
EUR [100-200] million at end-2008 to EUR [100-200]
million at end-2010 (it had deteriorated previously,
(107) Consequently, in order to exceed the average returns
increasing from EUR [100-200] million at end-2005 to
observed, a professional investor must rely on in-depth
EUR [100-200] million at end-2008). In view of the
knowledge of the market, which is the case for the
aggregate level of the forecasted EBITDA for the period
FMEA, and provide for a participation structure
2009-11, the absence of significant additional costs
enabling it to optimise its return, which is also the
associated with tangible and intangible investments and
case for the FMEA investment (see the considerations
the absence of additional provisions to cover the restruc
concerning the structure of the investment in recitals
turing costs, the forecast of a reduction of EUR [0-30]
94 and 95 and the sharing of the capital gain in
million seems prudent.
recitals 110 and 111).
(102) In the light of the above, it is appropriate to conclude
(108) Secondly, the French authorities invoke a study by the
that the calculation of the IRR at the time of the
AFIC (French Venture Capital Association), which follows
investment is based on reasonable assumptions.
the performance trend of the venture capital sector in
France. This study is based on data communicated by
more than 120 structures managing more than 500
investment funds. The work of the AFIC shows a net
R e g a r d i n g t h e a c c e p t a b i l i t y o f a n I R R o f
performance of between 14,1 % for end- 2007 and
[ > 1 2 % ] a n d t h e s h a r i n g o f t h e c a p i t a l
10,8 % for end-2008 (the closest date to the FMEA
g a i n
investment) for ‘development capital’. Development
(103) As regards the question whether the IRR referred to of
capital is the relevant subdivision of venture capital
[> 12 %] is acceptable in the light of the risk entailed in
from the point of view of the FMEA investment policy
the investment, the Commission makes the following
(acquisition of minority holding and injection of fresh
comments.
capital). After taking account of the cost of remuneration
of the management company, estimated at a maximum
of […], the target IRR to be attained to be able to
produce a ‘market’ performance is between 12 % and
(104) Firstly, it should be recalled that the calculation made on
15 %.
the basis of the information set out in recitals 97 to 100
in reality results in an IRR of [> 15 %]. However, in the
interests of safety and prudence, the FMEA applied a
( 21 ) This measure is undertaken on the basis of a significant stock
market price index of the main automobile parts manufacturers.
discount of […] % to the EBITDA forecasted for 2011.
If the crisis is included, the average IRR for the 5 years preceding
Consequently, the IRR of [> 12 %] adopted for the
1 December 2009 slumps to 4,7 %.

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EN
19.10.2011 Official
Journal
of
the
European
Union L
274/13
(109) Finally, the parameters available at the time of the
C o n c l u s i o n c o n c e r n i n g t h e c r i t e r i o n o f
investment enable a weighted average capital cost
b e n e f i t
(‘WACC’) to be determined on the basis of the
CAPM ( 22 ) and adapted to the motor vehicle sector in
(113) Having analysed the Trèves restructuring plan, its
France, integrating the additional specific risk premiums
valuation prior to the FMEA investment, the structure
associated with the dimension of Trèves and the non-
of this investment, the assumptions underlying an IRR
liquid nature of the investment. In view of these addi
of [>
12
%] and the appropriateness of this IRR,
tional factors inherent in the risk premium, the corre
especially in the light of the shareholder agreement
sponding WACC is estimated at [> 12] % at the time of
provided for regarding the sharing of the capital gain,
the investment, raised to [> 12] % by the FMEA (see
it should be pointed out that the FMEA operated under
recital 91). It must be borne in mind that the WACC
conditions similar to those that a private investor would
is the minimum rate of return required by the providers
have required in respect of an investment presenting a
of capital of an undertaking (shareholders and creditors)
risk associated with both the situation of the motor
to finance investment projects. The WACC calculated for
vehicle industry at the time of the investment and that
Trèves therefore gives a significant indication regarding
of the company, which was experiencing certain financial
the acceptability of a ‘minimum’ IRR of [> 12 %] ( 23 ).
difficulties. In other words, the FMEA investment
amounting to EUR 55 million respects the criterion of
the private investor operating in a market economy.
(110) Moreover, it should be emphasised that Trèves’ capital
Therefore it does not confer any benefit on Trèves.
gain will not be shared between the FMEA and the
historical shareholder according to their respective share
in Trèves’ capital. In fact, assuming an exit in […], the
shareholder agreement specifies that the first EUR […]
million of the value of the company will be allocated in
V.1.2. The tax and social security debt rescheduling plan
full to the FMEA (first tranche). Then, the proceeds from
the sale amounting to between EUR […] million and an
(114) The French authorities authorised Trèves’ tax and social
amount equal to that of the FMEA investment capitalised
security debt rescheduling plan for an amount of
at […] % per year is shared between the FMEA ([…] %)
EUR 18,4 million. The Commission first wishes to
and the historical shareholders ([…] %) (second tranche).
examine the criterion of benefit in relation to this
Finally, the FMEA receives […] % of the proceeds of the
measure.
sale beyond this threshold and the historical shareholders
[…] %.
(111) This agreement on the sharing of the capital gain
B e n e f i t
provides protection for the FMEA. In fact, the FMEA in
this way receives a significant guarantee that an IRR of
(115) According to the Commission’s decision-making practice
[> 12 %] on its investment will rapidly be attained (this
and case-law, a debt rescheduling agreement by a public
rate corresponds to the WACC of Trèves presented
creditor is not State aid if it has acted like a private
above). Secondly, this agreement is a strong incentive
creditor which ‘seeks to recover sums due to it and
for the historical shareholder and the company
which, to that end, concludes agreements with the
managers to achieve, and even exceed, the objectives of
debtor, under which the accumulated debts are to be
the restructuring plan, with this plan resulting in an IRR
rescheduled or paid by instalments in order to facilitate
of [> 12 %], [> 15 %] or [> 20 %] for the FMEA,
their repayment’ ( 24 ).
depending on the scenario.
(112) Consequently, it results from the findings above that the
estimated IRR of [> 12 %] was reasonable at the time of
(116) For Trèves’ public creditors, the debt rescheduling plan is
the investment and acceptable in the light of the risk it
a better solution than enforced recovery. In fact, in the
entails.
case of forced recovery, the public creditors, in the light
of the company’s general level of debt, would have
recovered only part of their non-preferential claims. On
( 22 ) Capital asset pricing model.
the other hand, by authorising the rescheduling, first-
( 23 ) The WACC calculated is based on the debt costing [0-10] % and
equity [10-20] %. In view of the composite structure of the FMEA
ranking mortgages […] (Article […] of the conciliation
investment (capital contribution and convertible bond
protocol of 25 May 2009) were established with a view
contribution), it is inappropriate to assess this investment by
to guaranteeing the tax and social security debts. These
giving priority to either the cost of the debt or the cost of the
assets are identified in Annex 7 to the protocol. At
equity. It is observed, for example, that the FMEA claim from the
31 December 2008, their net accounting value was
debt securities is preferential (preference of new money). In
EUR [25-35] million. The volume of the collateral estab
addition, in relation to the new credit facility amounting to EUR
[10-30] million granted by the banks, the FMEA negotiated a ‘pari
lished in favour of the public creditors therefore covers
passu’ position for a significant proportion of the debt securities, i.e.
over 140 % of the amount of their claim, which
covering a tranche of EUR [10-20] million. The level of the WACC
comprises the principal (EUR 18,4 million), penalties
therefore seems the best indicator. Be that as it may, it should be
for late payment and interest on arrears (see recital 117).
pointed out that the cost of equity amounting to [10-20] %, which
in any case cannot be adopted as such for the reasons mentioned
above, is lower than the IRR of [> 15 %] expected in the base
( 24 ) Court of Justice judgment of 29 April 1999 in Case C-342/96 Spain
scenario which constitutes the return required by the FMEA.
v Commission, known as ‘Tubacex’, [1999] ECR I-2459.

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L 274/14
EN
Official Journal of the European Union
19.10.2011
(117) Moreover, Trèves’ public creditors will receive interest. In
V.2. Conclusion regarding the assessment of the
fact, the amount of EUR 18,4 million was supplemented
presence of State aid within the meaning of
by penalties for late payment of EUR [1-2] million and
Article 107(1) TFEU
interest on arrears of EUR [1-2] million, with the sum
being repayable in full between […] and […] in monthly
(122) In the light of the factors set out in Section V.1., it
instalments of EUR […]. The addition of penalties and
appears that neither the FMEA investment amounting
interest on arrears amounts to EUR [2-4] million, i.e.
to EUR 55 million or the tax and social security debt
[10-20] % of the principal, which represents annual
rescheduling plan amounting to EUR
18,4 million
interest of about [0-10] % over the weighted average
confer a benefit on the Trèves group. Consequently,
duration of the rescheduling plan. This rate was from
these measures do not constitute State aid within the
the start higher than the rates granted by the financial
meaning of Article 107(1) TFEU.
institutions for the loans granted to Trèves under the
conciliation protocol of 25 May 2009, for both the
new credit and the consolidation loan (
VI. GENERAL CONCLUSION

25 ).
(123) After having carried out a detailed investigation of the
measures in question, the Commission finds that they do
(118) In this respect, it should also be emphasised that the
not constitute State aid within the meaning of
commitment of the public creditors occurred at the
Article 107(1) TFEU,
same time as a major commitment by the banks
(consolidation loan of EUR [30-60] million and new
credit facility of EUR [10-30] million). Moreover, the
HAS ADOPTED THIS DECISION:
conciliation protocol explicitly indicates that the
securities granted to the banks are second-ranking […],
which means that these creditors cannot call upon any
Article 1
security until the first-ranking public creditors have all
The two measures taken in relation to the company Trèves,
been repaid in full.
consisting of an investment by the Fonds de Modernisation
des Equipementiers Automobiles (Fund for the Modernisation
of Automobile Parts Manufacturers) (FMEA) amounting to
(119) In addition, no tax and social security debt remission was
EUR 55 million and a tax and social security debt rescheduling
granted to the Trèves group.
plan amounting to EUR 18,4 million authorised by the French
Republic, do not constitute aid within the meaning of
Article 107(1) of the Treaty on the Functioning of the
(120) Finally, the French authorities confirmed that the current
European Union.
rescheduling plan did not constitute an extension or
modification of a previous plan.
Article 2
This Decision is addressed to the French Republic.
(121) Consequently, it results from the above that Trèves’ tax
and social security debt rescheduling plan was authorised
by the French authorities on the basis of the
Done at Brussels, 20 April 2011.
assumptions, deemed to be credible, which underlie the
restructuring plan (see Section V) and subject to terms
For the Commission
and conditions which are acceptable to a private creditor
operating in a market economy under the same circum
Joaquín ALMUNIA
stances.
Vice-President
( 25 ) However, these rates are established by adding a margin based on
the EURIBOR rates, which are floating rates. Consequently,
comparison with the fixed rate of [0-10] % is not entirely
relevant, even though since 25 May 2009 the rates granted by
the banks have never exceeded [0-10] %.

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