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EC objects to financial assistance for Lecta Condat

16 Aug 2019 − 

The European Commission is not well-disposed to support Lecta, who is seeking funds in order to be able to realign its Condat mill. A first, non-binding decision has been made.

Support from the European Commission (EC) for financial assistance to French papermaker Lecta, who is considering a machine rebuild at its French Condat mill, remains doubtful. Lecta announced on 12 August that - during the pre-notification phase - the EC objected to financial support on a preliminary basis.

Lecta had applied for state support in the form of energy contribution subsidies, which could add up to €35m, for a period of three years, arguing that it relied on the assistance because of the high energy costs in the country. The funding is to enable a machine rebuild at the mill and ensure the continued existence of the Condat mill, which according to Lecta is operating at the edge of profitability.

Lecta underscored that the EC decision was not binding and that the company was continuing to explore funding options with the French authorities. Other arrangements not subject to pre-notification were considered as well, the company said.

Against this backdrop, it remains unclear if or when the rebuilding project at the Condat mill will be implemented. Lecta had announced in February that it was considering rebuilding PM 8 at the mill to produce label paper. The machine is currently designed to produce woodfree coated paper but was temporarily shut down at the end of April due to poor demand on fine paper markets

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