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Hellenic Shipyards S.A.

Hellenic Shipyards, with related capabilities, was sold to Abu Dhabi MAR. ThyssenKrupp had acquired HSY in 2005, as part of its contract to deliver 4 U214 submarines to the Greek Navy, and the acquisition by Abu Dhabi MAR gave it a submarine construction capability. The Greek government was in default on the U-214 contract. ThyssenKrupp AG (TKA.XE) said 2 May 2010 it expected to be able to sell its Greek unit Hellenic Shipyard, or HSY, to shipbuilding group Abu Dhabi MAR by the end of the current fiscal year. ThyssenKrupp Chief Executive Officer Ekkehard Schulz said framework agreements with Abu Dhabi Mar and the Greek government have already been concluded on the matter. ThyssenKrupp's fiscal year ends Sept. 30.

Hellenic Shipyards S.A. is the largest shipyard in the area of the eastern Mediterranean. It stands worldwide for its outstanding experience in building and repairing naval and commercial ships. Founded over fifty years ago, Hellenic Shipyards S.A. was part of the TKMS Group, and moved into the high technology end of the business with the construction of the most advanced conventional submarines in the world. Together with the TKMS know-how transfer, the Shipyard's privileged geographical position, its remarkable facilities and its staff's rich technical experience, Hellenic Shipyards S.A. opened a new chapter in its history and aspired to an even higher level of competitiveness.

Hellenic Shipyards has successfully built a series of different types of vessels for the Hellenic Navy and the Hellenic Coast Guard. Thus, as a proven reliable partner, it has gained strategic importance in the further development of the naval defense and coast-guarding capabilities of Greece. With its own designs but also in co-operation with leading naval shipbuilders (like CMN and Blohm + Voss) and weapons and electronic suppliers (like Thales, Sagem), Hellenic Shipyards has also become the prime contractor in the implementation of projects for the Hellenic Navy.

Focused on the needs of the customer, the Hellenic Navy, and with an ongoing close and harmonious working relationship with the representatives of the Navy who are permanently stationed at the company, the Shipyard is fully committed to the successful completion of all projects currently in progress at its site and to the full satisfaction of its customer.

Indicative of the scope of work done by HSY in the past, is the building of 10 Abekin & Rasmussen design and 3 Panagopoulos design fast patrol boats, 3 Osprey 55 Danyard design naval vessels, 1 diesel and 1 HDO carrier, the conversion of 2 ships (Axios and Aliakmon) from general support vessels to oilers and the retrofiting of a large number of vessels - for example the Apostolis for fire control retrofit.

Hellenic Shipyards has achieved an excellent international reputation not only in the new building of naval ships but also in their repair and modernisation. Experience gained in work done for the USA 6th Fleet has served the Greek Navy well. And nothing shows better the company’s dedication to serving the needs of its clients than the successful running of the Naval Ships currently in operation.

In co-operation with CMN, Hellenic Shipyards built and successfully delivered until 1981, 6 Fast Attack Craft for the Hellenic Navy. HSY has developed the design for a fast patrol boat according to the specific needs of the Hellenic Navy (Pyrpolitis Class) and successfully delivered in 1993/94, 2 Fast Patrol Boats. Having further improved the HSY design in order to comply with the rules of Germanischer Lloyd and also to implement a new combat suite, in 1999 the Hellenic Navy awarded the building of another 4 Gunboats (Machitis Class) to Hellenic Shipyards. These four boats have also been successfully delivered, to the full satisfaction of the Hellenic Navy. In co-operation with Israel Shipyards, HSY built and successfully delivered in 2004 one of three OPV for the Hellenic Coast Guard.

In co-operation with Blohm + Voss - one of the world’s leading naval shipbuilders - Hellenic Shipyards built and successfully delivered in the period from 1996 to 1998, 3 Frigates to the Hellenic Navy. These advanced vessels incorporated state-of-the-art equipment and electronic and weapons systems with variable payload standardized modules. In compliance with the specific needs of the Hellenic Navy, the Hydra Class Frigates have been equipped with a helicopter incl. Hangar as well as with the respective sensors and weapons for an effective defense of air, surface and underwater targets.

In February 2000 HSY undertook as Prime Contractor the procurement of four (4) class 214 Submarines. This is the most advanced conventional submarine in the world and the Greek State was the first in the world to order it. The contract award provided for the building of the first submarine at HDW’s Kiel yard and for the building of the other three (3) submarines in Greece at HSY premises. Submarine construction at HSY started in 2002-following the investments for the creation of the necessary infrastructure- while the first Kiel-built submarine, named PAPANIKOLIS was launched in Kiel, Germany on April 2004.

In the HSY Steel Assembly Hall shipbuilding works on the Pressure Hull Sections are performed for the three (3) Class 214 Submarines, under construction for the Hellenic Navy. In the HSY Submarine Outfitting Hall, work is done on the platforms and on the Pressure Hull Sections. After the completion of the outfitting of the individual Sections, these will be joined together. The Greek METKA company is an approved partner to which hull-related work has been outsourced. Two other Greek companies also carry out significant work for the submarines, namely GERMANOS - that provides the batteries - and MOTOMARINE - that builds parts of the GRP system. Smaller scale work is done by other Greek companies. This outsourcing, within the framework of the off-sets agreement, furthers the effort to spread in the Greek business community the benefits from the transfer of technology and contributes both to the maintenance of existing and to the creation of new jobs.

The contract was to be completed in the year 2010 and more than 650 highly qualified personnel were employed.

Further to the class 214 Program, in 2002, HSY was also awarded by HMOD the contract for the Mid Life Modernization and repair of three (3) type 209 HN Submarines (Neptune II Program). The most significant of the upgrades to be performed on the three (3) Type 209 HN Submarines, entails the installation of the new and modern Fuel Cell Section. The Air Independent Propulsion (AIP) is one of the recent innovations that have captured the attention and won the admiration of the submarine world. After lengthy studies and discussions it is now the accepted wisdom that the fuel cell systems are the ideal solution for air independent propulsion of conventional (i.e. non-nuclear) submarines. The main reason is that they meet the highest demands in terms of ensuring both an extremely efficient energy conversion and the lowest possible signatures. Repair works on the first of the three (3) type 209 Hellenic Navy Submarines to be modernized started in November 2004.

In 2003 Hellenic Shipyards in co-operation with Thales Netherlands was awarded the status of prime contractor for the Midlife Modernization of 6 S-Class Frigates of the Hellenic Navy. The program was completed in 2009.

The yard was sold on 18 September 1995 - 49% of the shares - to a co-operative of the yard's workers. The conditions for approval of the aid seemed met. However, as regards the level of debts to be cleared, these had increase considerably due to interests and penalties on the initial GD 44 billion approved by the Commission in 1992. The new debts were part of the liabilities of the yard. The EU Commission considered that aid to cover new debts constituted new aid, and no legal basis existed to approve that new aid.

When the yard was partially privatised, a business plan was drawn to restore the viability of the yard and its management was awarded to a private company with the special task to implement such plan. A major element of that plan was an investment program aimed at replacing the old and obsolete equipment with new updated technology. The total cost of the program was estimated at GD 15 625 million. The aid represented 50% of the cost, which was within the regional aid limit accepted for Greece. The investments made were only for repairing or replacing the existing installations and equipment. No new equipment is added and no new installations are built. While previously all the installations of the yard could be used for military uses or for merchant uses, 540 m of docking facilities would be permanently allocated exclusively for military use.

In 1997, the EU Commission gave Greece the chance to restructure the civil commercial activities of HSY by authorising €160 million of aid. Unfortunately, some crucial conditions attached to the approval have not been complied with. As regards the €160 million restructuring aid authorised in 1997 (IP/97/648), HSY only implemented a part of the investment plan necessary to modernise the yard. Moreover, the authorisation of the aid was conditional upon the execution of an agreement concerning the sale of a 49% stake in HSY to its employees for a price of €24 million to be paid over 12 years. However Greece never collected the contractual purchase price from the employees. In addition, Greece repeatedly provided unlawful and incompatible financing to the loss making civil activities of the yard until 2002.

The EU Commission found that several of these aids were granted to HSY by the Greek State and the then State owned bank ETVA in the form of loans, guarantees and capital injections without prior authorisation from the Commission and, in addition, they were incompatible with state aid rules. The Commission also found that Greece and HSY failed to respect conditions attached to the aid it had authorised in 1997 (see IP/97/648) and in 2002 (see IP/02/816). All of these measures, worth more than €230 million, benefited the civil commercial activities of HSY giving it an unfair advantage over its competitors.The Commission also found that some measures investigated, worth tens of millions of euros, do not constitute state aid, some are compatible aid, and some supported the production of military ships for the Greek Navy and are therefore exempted from EU state aid rules.

On 02 July 2008 the European Commission requested Greece, following an in-depth investigation under EC Treaty state aid rules (see IP/06/925), to recover more than €230 million of illegal state aid from Hellenic Shipyards S.A. (HSY). Between 1996 and 2002, Greece implemented 16 separate aid measures for HSY, at a time when the yard was in difficulty. They therefore have to be recovered with interest from HSY.

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Page last modified: 05-04-2017 19:31:43 ZULU