Sat. Oct 1st, 2022

The European Commission has approved, under EU State aid rules, Poland’s plan to grant RAFAKO S.A. approximately €22 million (PLN 100 million) of restructuring aid. The measure is aimed at helping RAFAKO, a Polish company active in the energy, heating, oil and gas sectors, to partially finance its restructuring plan and restore its long-term viability until the end of 2024.

Under the scheme, the aid will take the form of convertible bonds. Poland put forward measures to limit the distortions of competition, in particular (i) the divestment of RAFAKO’s E-bus branch, active in the development and production of electric buses, and (ii) a ban on RAFAKO from acquiring shares in any company for the duration of the restructuring plan.

The Commission assessed the measure under Article 107(3)(c) of the Treaty on the Functioning of the European Union, and in particular its Guidelines on State aid for the rescue and restructuring of undertakings in difficulty. The Commission found that the aid is necessary and appropriate to ensure that RAFAKO restores its long-term viability. Furthermore, the aid contributes to Poland’s energy green transition as RAFAKO develops and supplies unique technologies upgrading the environmental performance of some of Poland’s largest power plants and projects.

The Commission also found that the aid is proportionate, as RAFAKO and its creditors will contribute to around 65% of the expected restructuring costs, in particular through asset sales and a debt-restructuring agreement that writes-off or converts into equity part of the company debt. Finally, the Commission found that the planned measure contains adequate safeguards (i.e. the divestment of E-bus and the acquisition ban) to limit any potential distortions of competition and trade between Member States.

On this basis, the Commission approved the Polish measure under EU State aid rules. The non-confidential version of the decision will be made available under the case number SA.64760 in the State aid register on the Commission’s competition website once confidentiality issues have been resolved.