The European Commission said it was taking Greece to the European Court of Justice (ECJ) over its failure to recover €135.8-million of illegal state aid to Larco which is struggling under heavy debt.
Larco, which is 55% owned by the state, is floundering under half a billion euros in debt owed to suppliers, contractors, banks and pension funds, including €350-million in arrears to power utility Public Power Corp.
The Greek parliament cleared an amendment which stipulates the appointment of an administrator in March to liquidate Larco, cut wage costs by an average 25% and push ahead with a fast-track tender to sell a smelting plant and some of its mines.
“This plan is Larco’s last chance,” Energy Minister Kostis Hatzidakis told lawmakers who debated the law. “I hope this effort succeeds and a reliable investor is found.”
If the administrator fails to sell 75% of Larco assets within 12 months from appointment, Larco will have to file an application for bankruptcy, according to the new legislation.
Industry sources have said private equity fund Global Special Opportunities might be interested in Larco, which employs about 1 000 people in Greece.