The government plans to legally dispute illegal state aid claims made by the European Commission for funds provided in the past to Larco, the troubled state-controlled general mining and nickel producer, and not launch procedures to sell the enterprise, but, instead, present a business plan which the country’s administration believes will ensure the industrial unit’s sustainability. This plan will include an agreement with main power utility PPC for overdue amounts owed by the industry, one of Greece’s largest power consuming facilities.
The Greek side’s latest strategy aiming to counter the various problems at Larco was decided on at an interministerial meeting held yesterday at the finance ministry. Energy minister Panos Skourletis and Larco’s top officials took part in the meeting.
Meanwhile, Larco and the Greek government face a three-week ultimatum issued by the European Commission just days ago for the immediate return of 136 million euros, plus interest, for a total amount of 160 million euros. The amount concerns state aid provided to the industry between 2008 and 2010, which the EU executive body views as illegal.
Larco’s financial woes have been made worse by the drop in commodity prices. The industry is believed to be incurring losses of roughly eight million euros per month.
The mining and nickel producer’s employees have already reacted to the board’s intention to restructure the industry by cutting salaries and jobs.
Larco also needs to reach a new electricity tariff agreement with PPC. The industry owes PPC over 200 million euros, while the amount is increasing at a rate of five million euros per month.