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new f2State aid: Commission gives the Walloon Region permission to convert a €43.5 million claim against Sonaca into equity

The European Commission has approved a plan by the Walloon Region to convert into equity a residual claim of €43.5 million held against the Belgian aeronautics company Sonaca, in which the Region has a 92.29% holding. The Commission did not consider that this conversion constituted State aid because a private investor would have taken the same action in the same circumstances.

The information submitted by the Belgian authorities showed that if the company were forced into liquidation only a very small proportion of the public debt would be recoverable. If the debt were converted, on the other hand, the prospects of a return on investment for the Region were good, particularly in view of the orders already received and anticipated by Sonaca.

Belgium had therefore shown that a private investor in the same situation vis-à-vis Sonaca as the Walloon Region would have proceeded to convert its residual claim of €43.5 million into equity. Consequently, the conversion did not confer an undue economic advantage on the company and did not, therefore, constitute State aid within the meaning of European Union rules.


Sonaca is active in the field of commercial aviation and produces parts used in the manufacture of medium and long-haul aircraft. Approximately 75% of Sonaca’s production consists of leading edges for aircraft wings. The remaining 25% relate to various pieces of aircraft fuselage and to de-icing systems.

Public interventions in companies that carry out economic activities can be considered not to constitute state aid in the meaning of the European Union rules when they are made on terms that a private player operating under market conditions would have accepted (the market economy investor principle – MEIP). If the MEIP is not respected, the public intervention constitutes state aid in the meaning of Article 107 of the Treaty on the Functioning of the European Union (TFEU), because it procures an economic advantage for the beneficiary that its competitors do not have. The Commission then assesses whether such aid can be found to be compatible with common European Union rules that allow certain categories of aid.

The non-confidential version of the current decision will be made available under the case number SA.35131 in the State Aid Register on the DG Competition website once any confidentiality issues have been resolved. New publications of state aid decisions on the internet and in the Official Journal are listed in the State Aid Weekly e-News.