ANNOUNCEMENT 05 Dec 2017

In December 2017, the European Investment Bank (EIB) signed a loan agreement with Latécoère S.A. to support its investments in product research, innovation and development as well as the construction of two manufacturing plants. The loan is guaranteed by the European Fund for Strategic Investments (EFSI).

NUMBER OF INTERVENTIONS

3

  • 3 harmful
  • 0 neutral
  • 0 liberalising

SOURCE

The European Investment Bank, Financed Projects, LATECOERE AEROSTRUCTURE RDI: https://www.eib.org/en/projects/loan/loan/20140213
The European Investment Bank, Project summary, LATECOERE AEROSTRUCTURE RDI: https://www.eib.org/en/projects/pipelines/pipeline/20140213
The European Investment Bank, press release of 22 May 2018, France: Juncker Plan – EIB finances Latécoère's factory of the future in Toulouse-Montredon: https://www.eib.org/en/infocentre/press/releases/all/2018/2018-122-plan-juncker-la-bei-finance-l-usine-du-futur-de-lat%C3%A9co%C3%A8re-%C3%A0-toulouse-montredon
Latécoère S.A., press release of March 2018, LATÉCOÈRE SETS UP IN BULGARIA: https://www.latecoere.aero/en/latecoere-sets-up-in-bulgaria/
Latécoère S.A.: https://www.latecoere.aero/en/
European Commission (13 January 2015): The Investment Plan for Europe: Questions and Answers: http://europa.eu/rapid/press-release_MEMO-15-3223_en.htm
EIB: European Fund for Strategic Investments - Questions and Answers. Available at: http://www.eib.org/attachments/press/investment_plan_for_europe_qa_en.pdf

Inception date: 05 Dec 2017 | Removal date: open ended
Still in force

State loan

On 5 December 2017, the European Investment Bank (EIB) and Latécoère S.A. signed a loan agreement having a total value of EUR 55 million (approx. USD 65 million). 

The loan will support the company's investment project concerning product development, research and innovation of "doors, optical networks, racks and cockpits, cabin infrastructure and video systems" for commercial aircraft. The loan will also support the construction of a manufacturing plant in France. Lastly, the loan will support the company's construction of a new assembly plant located in Bulgaria, see related intervention.

According to the EIB: "The RDI activities included in the project will contribute to increasing the promoter's (ed. Latécoère) knowledge and know-how in the field of components for aero-structures and aircraft cabling solutions."

Latécoère S.A. has its headquarters in France and is present in a number of locations in the United States, Europe, Africa, Brazil and India. The company is a supplier of doors, fuselage sections, wiring and avionics racks for commercial aircraft.

A state act in the GTA database is assessed solely in terms of the extent to which its implementation affects foreign commercial interests. On this metric, the investment support granted here is discriminatory. 

AFFECTED SECTORS

 

AFFECTED PRODUCTS

 
Inception date: 05 Dec 2017 | Removal date: open ended
Still in force

Financial assistance in foreign market

On 5 December 2017, the European Investment Bank (EIB) and Latécoère S.A. signed a loan agreement having a total value of EUR 55 million (approx. USD 65 million). 

The loan will support the company's construction of a new assembly plant located in Bulgaria. The plant will support the company's Aerostructures division concerning small assembly work related to doors and fuselage sections. Additionally, the loan will support the investment project concerning product development, research and innovation and the construction of a manufacturing plant in France, see related intervention.

According to the EIB: "The EIB financing will also support Latécoère's research, development and innovation activities with a view to conquering new markets via updated processes and cutting-edge technologies, improving the company's competitiveness with the goal of achieving industrial excellence."

Latécoère S.A. has its headquarters in France and is present in a number of locations in the United States, Europe, Africa, Brazil and India. The company is a supplier of doors, fuselage sections, wiring and avionics racks for commercial aircraft.

A state act in the GTA database is assessed solely in terms of the extent to which its implementation affects foreign commercial interests. On this metric, the investment support granted here is discriminatory. 

Inception date: 05 Dec 2017 | Removal date: open ended
Still in force

Loan guarantee

The EIB's loan to Latécoère S.A. signed on 5 December 2017 was issued under the European Fund for Strategic Investment (EFSI). The loan has a total value of EUR 55 million (approx. USD 65 million) and will support the company's investments in product research, innovation and development as well as the construction of two manufacturing plants.

Latécoère S.A. has its headquarters in France and is present in a number of locations in the United States, Europe, Africa, Brazil and India. The company is a supplier of doors, fuselage sections, wiring and avionics racks for commercial aircraft.

The EFSI is a joint initiative by the EIB and the European Commission to promote investment in Europe. The EIB has designated EUR 7.5 billion of its capital for lending to European projects with a higher risk profile than usually taken on by the bank. To compensate for the increased lending risk, the European Commission has agreed to fully guarantee all lending under the EFSI up to a budget of EUR 26 billion. The loan described was issued under the EFSI and thus benefits from a full guarantee through the EU budget.

EFSI support does not fall under EU State Aid rules as it is meant as a tool to address "market failures or sub-optimal investment situations". However, the investment support does include favourable conditions in the form of public assumption of risk.

As described in the European Commission's Fact Sheet from 13 January 2015: "The type of risk-financing instruments will be designed so as to take uncertainty out ("first loss protection") of as such viable projects and therefore crowd-in private sector investments. Since the EFSI will take riskier tranches in investment projects, the private sector will be able to join under more favourable conditions." Furthermore, the EIB states that "The new initiative [i.e. the EFSI] will benefit from the EIB’s strong credit standing that enables funding at favourable conditions and across maturities".