3.5 94 Official Journal of the European Communities No L 112/77 COMMISSION DECISION of 12 April 1994 concerning aid to be granted by Spain to the special steel company Sidenor (Only the Spanish text is authentic) (94/261/ECSC) THE COMMISSION OF THE EUROPEAN COMMUNITIES, Having regard to the Treaty establishing the European Coal and Steel Community, and in particular the first and second paragraphs of Article 95 thereof, After consulting the Consultative Committee and with the unanimous assent of the Council, Whereas : The Community steel industry is currently experiencing its most difficult period since the first half of the 1980s. This is due to the general slowdown in the economy, which has had a significant effect on industrial activities in general, and on the steel industry in particular, leading to a serious imbalance between supply and demand, accompanied by a collapse in prices. In addition, the international market generally has been weak : there is pressure from imports and there has been a trade dispute with the United States of America affecting substantial Community exports to that market. All of these factors have combined to aggravate the financial situation of almost all steel companies in the Community. II In April 1992, Spain notified the Commission of a plan to restructure the Spanish special steels company Sidenor (incorporating Acenor and Foarsa) and the associated financing by which it intends to support it. The plan involves Acenor and Foarsa ceasing their activi- ties, which would be taken over by Sidenor, and comprises a number of industrial, commercial, social and financial restructuring measures, which are intended to allow Sidenor to achieve, by the end of 1995, adequate operating results to achieve viability. The restructuring plan, as submitted, provides for the definitive closure of two of Sidenor’s six plants at Llodio and Hernani (each comprising electric arc furnaces and rolling mills), resulting in capacity reductions of 505 000 tonnes in liquid steel and 379 000 in hot-rolled products (a reduction of 31 %). The plan also envisaged reductions in the workforce of 1 8485, from 4 725 as at 1990 to 2 880 in 199S5. The financing of the plan includes aid elements that the Commission considers to be incompatible with the ECSC Treaty and Commission Decision No 3855/91/ECSC () (Steel Aid Code, hereinafter referred to as ‘the SAC’). The Commission estimates that this aid amounts to a maximum of Pta 80,052 billion, serving the following purposes : — up to a maximum of Pta 26,3 billion for the writing- off of Acenor and Foarsa debts, — social aids up to a maximum of Pta 7,79 billion, " — new paid-in capital of a maximum of Pta 20,2 billion, and — up to a maximum of Pta 25,762 billion in the form of loss compensation to cover additional operating losses and financial charges in 1992 and 1993 over and above those originally forecast in the plan. This aid includes the measures that were the subject of the procedure opened pursuant to Article 6 (4) of the SAC by the Commission in July 1992 (3, in order to investi- gate certain aid measures already granted in favour of Acenor illegally, without prior notification to the Commission, allowing the company to continue to operate despite its financial difficulties. The figure for social aid takes into account the possible closure of the Larrondo plant and additional reductions in the workforce at Sidenor’s other plants (see below). Furthermore, additional social aid up to a maximum of Pta 7,79 billion is being authorized separately by the Commission as compatible with Article 4 (1) of the SAC. 111 The Commission, assisted by an external expert, has assessed the viability of the restructuring plan, applying the same criteria as those imposed by the Commission during the previous restructuring of the Community steel () OJ No L 362, 31. 12. 1991, p. 57. () O] No C 234, 12. 9. 1992, p. 5.