Loss of €108 mln in four years
The future of state mining company Larco remains unclear, four costly years after it was put under special administration; in those years the state has paid 108 million euros in fines and subsidies.
The completion of the process of transferring the assets of Larco (from the special administration) and leasing the state assets to the GEK Terna-AD Holdings AG joint venture, which was named the preferred investor of the two parallel tenders on January 25, has been frozen following an appeal of an annulment application to the Supreme Court by the Irish company CMI.
The hearing of the application, set for October 10, was postponed due to the mediation of the national elections and referred to December 12. In the best-case scenario, if there is no new judicial adjournment and the decision of the Council of State does not overturn the result of the tender, another extension of the special administration will be required to complete the transfer process and additional funding from the state budget.
The special administration status expires on February 7, 2024. By the same decision of the Finance Ministry, the stay of the company’s employees was also extended until end-2023, with their remuneration essentially granted from the state budget, since the factory has been shut down since July 2022.
The debt of state aid (135.8 million euros plus interest) still hangs over the company, while the state has already started paying fines for its non-recovery. According to an document by Minister of National Economy and Finance Kostis Hatzidakis, the state has already paid two fines €8.7 million and the payment of the fine of €4.368 million for a third period is imminent, while it has also paid the flat-rate fine of €5.5 million to Brussels.
The Greek authorities, according to the ministry, have asked Brussels for confirmation that the sale process (as implemented) complies with the requirements of the 2014 decision of DG Comp on the structure of the sale, which provided that state aid will not be burdened by the new investor.
