ECONOMY

Larco mining company runs risk of closure

larco-mining-company-runs-risk-of-closure

State ferronickel production company Larco faces a tough reality after the European Commission announced on Wednesday it is taking Greece to the European Court of Justice for not complying with the same court’s 2017 ruling that it should recover state subsidies amounting to 135.8 million euros.

The government must now make some hard decisions if it wants to ensure the operation of the mining company founded in 1963, as no solution has emerged in the last five years. As a result of that, Larco is now burdened not only with the subsidy-related debt of 135.8 million euros, but also arrears of more than 300 million euros to Public Power Corporation. Experts say it is threatened with a sudden death, given that it incurs operating losses.

“The only solution to secure a strategic investor would be by preventing them from being considered the absolute heir of all of Larco’s obligations, otherwise no serious investors will be interested,” legal sources have told Kathimerini. Such a solution would be in the form of an operational resolution regime, along the lines of the model agreed in 2014 with the European Commission, or another formula through the bankruptcy code.