12.3.1999 Official Journal of the European Communities L 63/63 COMMISSION DECISION of 14 July 1998 on guarantees granted to Eisen- und Stahlwalzwerke Rotzel GmbH (notified under document number C(1998) 2369) (Only the German text is authentic) (Text with EEA relevance) (1999/196/ECSC) THE COMMISSION OF THE EUROPEAN COMMUNITIES, Having regard to the Treaty establishing the European Coal and Steel Community, and in particular point (c) of Article 4 thereof, Having regard to Commission Decision No 2496/96/ ECSC of 18 December 1996 establishing Community rules for State aid to the steel industry ('), and in particular Article 6 thereof, After giving notice to the parties concerned to submit their comments, Whereas: By letter dated 12 August 1997, the Commission informed the German Government of its decision to initiate the procedure under Article 6(5) of Decision No 2496/96/ECSC (hereinafter referred to as the ‘Steel Aid Code’) in respect of an 80 % deficiency guarantee granted by the Land of North Rhine-Westphalia to Eisen- und Stahlwalzwerke Rétzel GmbH (‘Rétzel). On 25 April 1995 the Land of North Rhine-Westphalia granted an 80 % deficiency guarantee to Rotzel to cover a bank credit amounting to DEM 15 million. The guarantee was granted on the basis of an approved guarantee scheme of the Land (N 155/88; letter of 9 June 1988, SG(88) D/6814). Approval was given only under the EC Treaty and not under the ECSC Treaty. It was also condi- tional in the sense that individual cases in sensitive sectors such as steel had to be notified individually. No notification of aid was made in this case. The credit and the deficiency guarantee were designed to support the restructuring plan of the company. Rotzel manufactures hot-rolled strip, cold-rolled strip and some profiled/alloyed products as its plant in Nettetal. Its hot- rolling production capacity is 54 000 t/year. The company () OJ L 338, 28. 12. 1996, p. 42. produces some 50 000 t/year of steel products in total, of which 30 000 t are hot-rolled and 20 000 t cold-rolled products. Approximately half of its hot-rolled production is consumed internally. Rotzel employs 170 people, of whom 95 are engaged in the production of cold-rolled products and 35 in the production of hot-rolled products. In the period 1950-1993 the company also operated a plant in Dinslaken with a hot-rolling capacity of 264 000 t/year. On account of market conditions the annual production of hot-rolled products decreased in the period 1976-1994, and Rotzel expanded its cold-rolling facilities in Nettetal, at an investment cost of some DEM 20 million. In the 1990s the situation worsened and Rotzel decided to close its plant in Dinslaken. The German Government puts the costs of closure at DEM 10,5 million. The production capacity of 264 000 t/year of hot-rolled products was dismantled. The closure of such a large part of the company prompted some restructuring that led to the reopening of hot-rolling mill No IV in Nettetal. The restructuring costs of the company following the closure of Dinslaken necessitated the sale of real estate and required in its last phase the abovementioned bank credit of DEM 15 million. The credit was secured for an amount of DEM 5 million by the two shareholders and as to 80 % by the Land of North Rhine-Westphalia in the form of a deficiency guarantee. According to the German Government, the investments did not concern the hot- rolling facilities in Nettetal. Rétzel’s products are covered by two different Treaties, the EC Treaty and the ECSC Treaty. Its hot-rolled prod- ucts fall under the ECSC Treaty. When initiating the procedure, the Commission argued that, since Rotzel is an undertaking engaged in production in the steel industry, it is caught by Article 80 of the ECSC Treaty and by the State aid rules set out in that Treaty. Although the afore- mentioned guarantee might have been granted only in