Following an in-depth investigation, the Commission concluded that Cimos' restructuring plan "will allow the company to become viable again in the long-term without needing further state support, and without unduly distorting competition in the single market", reads a release issued by Brussels on Monday.

A major Slovenian manufacturing company with almost 7,000 employees, Cimos Group has been in financial difficulties due to high bank debt that it was unable to repay.

In July 2013, the Commission approved temporary rescue aid of EUR 35m for Cimos, to give the company time to work out a restructuring plan capable of ensuring its long-term viability.

In November 2013, Slovenia notified a restructuring plan, which depended on the conclusion of a voluntary debt restructuring agreement with Cimos's banks. However, negotiations with the banks stalled so a court-mandated debt restructuring was launched.

The creditors reached an agreement in October 2014 and Slovenia updated the restructuring plan in light of the modified restructuring terms proposed.

Under the updated plan, the banks and the state agreed to restructure the company's debt through a debt-to-equity conversion and extending the repayment period.

The Commission's investigation indicated that the updated plan was based on realistic assumptions and should enable the company to return to long-term viability within a reasonable timeframe.

Cimos also committed to reduce its production capacity by divesting three profitable plants, which will limit the distortion of competition caused by the aid. Finally, Cimos will itself substantially contribute to the costs of restructuring.

The Commission therefore concluded that the planned restructuring aid complies with EU state aid rules and in particular the conditions set out in the guidelines on rescue and restructuring state aid.