The loan was made to Paris, France-based Bull in two parts in late 2001 and early 2002 in order to ensure the server and services vendor’s survival, and almost immediately sparked an investigation by the European Commission.
Under European rules, companies can only receive state subsidies for restructuring once, while Bull received E1.3 billion in restructuring aid in 1993, followed by E100 million in November 2001, and E350 million in March 2002.
The French government, which owns a 16.3% stake in Bull, has recently clashed with the European Commission over plans to rescue troubled engineering firm Alstom [ALSO.PA]. That clash, combined with a missed deadline for Bull to repay its loan, has resulted in European competition commissioner Mario Monti running out of patience with France, according to reports.
It is alleged that Bull has not even paid interest on the loan, and is not in a financial position to do so.
The company has not produced its usual half-year financial report, but in February stated that its net debt as of December 31, 2002 was $660 million (E564 million), including $546 million (E466 million) owed to the French state.
For the full year 2002, the company recorded a net loss of $155 million (E133 million) on revenue of $1.77 billion (E1.51 billion), down from $2.98 billion (E2.54 billion) in 2001 following restructuring, the sale of its CP8 smart card business to Schlumberger Ltd [SLB], and the sale of the bulk of its Integris services arm to fellow French IT services group Steria SA.
Bull should have plenty of time to make arrangements to repay the fine. It is reported that the EC’s lawsuit against the French government could take up to a year.
This article was based on material originally published by ComputerWire.
