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PR(04)43 - EFTA Surveillance Authority opens formal investigation of the sale of the Icelandic State’s shares in Sementsverksmiðjan

21.12.2004

The EFTA Surveillance Authority has decided to open a formal investigation procedure with regard to the privatization process of the formerly 100 %-owned State undertaking Sementsverksmiðjan.

In August 2003, the Icelandic authorities notified the Authority of their intention to sell the State’s shares in Sementsverksmiðjan, the only producer of cement in Iceland. The sale has to be seen against the background of the entry in the market of Aalborg Portland, exporting cement to Iceland from its factory in Denmark and the subsequent losses accumulated by Sementsverksmiðjan. On 2 October 2003, a group of investors bought Sementsverksmiðjan.

The Authority doubts whether the sale was carried out according to principles that ensured that the State obtained a price corresponding to the market value of the company. The doubts of the Authority are mainly founded on the fact that the sales price agreed was based on an estimated liquidation value of the company while there was a condition that operations should continue.

Should the identified measures constitute aid, the Authority would have to assess the compatibility with the rules of the EEA Agreement. In this context, the Authority points out that the decision to open the procedure does not prejudge the final outcome of the investigation.

The Authority’s decision to initiate a formal investigation will be published in the official Journal of the European Union and the EEA Supplement thereto and interested parties will be invited to submit their comments within one month of publication.

For further information, please contact Ms. Maria Segura, Officer, Competition and State Aid, on tel. (+32)(0)2 286 18 53

21 December 2004




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