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Report: European Commission Demands Elan's Bankruptcy

Ljubljana, 20 August (STA) - The European Commission has given Slovenia 20 days to launch bankruptcy proceedings at sports goods manufacturer Elan, the daily Dnevnik reports on Wednesday. The Commission reportedly sees this as the only way for the company to be able to repay EUR 10m in illegal state aid.

The repayment of the money which Elan received in a 2008 capital injection and which the Commission classified as illegal state aid in September 2012 should have been carried out at the beginning of last year.

The plan to raise the money included an entry of a private investor into Elan, but Dnevnik speculates that the Commission probably decided for the move due to a standstill in the privatisation proceedings.

The Commission notified Slovenia of its decision last week, according to Dnevnik. But it is unclear how the demand could be fulfilled, as the state is not directly entitled to the money but should get it through state-owned KAD fund and investment firm Triglav Naložbe.

The Finance Ministry refused to comment on the issue, while Minister Uroš Čufer reportedly has not yet notified any of the key players of the issue.

Several meetings are expected to be held on the topic in the coming days, while the European Commission told the paper it was in contact with Slovenia regarding the matter.

Recovering the money from Elan would at the moment push the company into insolvency and subsequently into bankruptcy.

One option would be for the Bank Asset Management Company (BAMC) to turn its claims to Elan in the amount of EUR 10m into capital, but this could again constitute illegal state aid.

Dnevnik further states that the Commission apparently has doubts on whether Elan is capable of surviving on the market in the long run.

According to Dnevnik, the Commission's decision was reportedly made under pressure from lobbyists of Austrian-Swiss company Cameva, one of the two companies interested in purchasing Elan.

Chief supervisor at Elan Aleš Zupančič commented on the Commission's decision by saying that this was a precedent and that Elan would use all legal means available to avoid meeting the Commission's demand.

He said procedures related to the sale of Elan were ongoing and that one Slovenian and one foreign investors were preparing their final bids.

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