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EC opens in-depth investigation into restructuring support for National Uranium Company

The European Commission (EC) has opened an in-depth investigation to assess whether various public support measures from Romania in favour of the National Uranium Company (CNU) are in line with EU rules on state aid to companies in difficulty, a press release informs.

Last year, on June 12, Romania notified to the Commission a plan for the restructuring of the state-owned Romanian company. The restructuring plan foresees around EUR 95 million (RON 441 million) of support to uranium company, in the form of grants, subsidies, debt write-off and debt-to-equity conversion. It follows an urgent rescue aid loan of around EUR 13.3 million (RON 62 million) to keep the company afloat, which the EC temporarily approved on 30 September 2016.

EU State aid rules only allow a state intervention for a company in financial difficulty under specific conditions, requiring in particular that the company is subject to a sound restructuring plan to ensure its return to long-term viability, that the company contributes to the cost of its restructuring and that any competition distortions are limited.

”At this stage, EC has doubts that the planned restructuring aid is in line with these conditions. In particular, the Commission’s in-depth investigation will examine whether the proposed restructuring plan could restore the long-term viability of CNU without continued state aid. Also, EC will investigate whether CNU or market investors sufficiently contribute to the restructuring costs, thus ensuring that the restructuring plan does not rely mainly on public funding and that the aid is proportionate. Moreover, Brussels officials want to know whether Romania is offering appropriate measures to limit the distortions of competition created by the aid,” the release reads.

The Commission will now investigate further to find out whether its initial concerns are confirmed. The opening of an investigation gives interested third parties the opportunity to submit comments. It does not prejudge the outcome of the investigation.

CNU is a fully state-owned Romanian company active in the exploitation of Romanian uranium mines and production of raw material transformed into fuel for nuclear power plants. CNU extracts uranium ore, processes it to form uranium octoxide (U3O8) and, after further refinery, transforms it into uranium dioxide (UO2). CNU has two operating sites: an uranium mining site, located in Crucea-Botusana (Suceava County, North-East region) and a processing-refining plant, located in Feldioara (Brasov County, Centre region). In 2017 the company employed 772 people.

CNU has been in financial difficulty since the loss of its main client, the nuclear energy producer Societatea Nationala Nuclearelectrica.

About Anca Bernovici