The European Commission has approved a €517m (£356m) grant from the French government to computer maker and IT...
services provider Groupe Bull.
However, in return for approving the grant, which is intended to help in the company's restructuring, the commission is insisting that Bull repay a €450m bailout, also from the French government, which was cleared in 2002.
The €517m grant is to be paid from 1 January 2005, on the condition that Bull has repaid the 2002 rescue money by then.
The restructuring plan involves cutting Bull's workforce to 7,800 and refocusing on its strengths: its GCOS proprietary servers, IT services for its branded products, and the development of a new range of open servers.
To repay the aid, Bull has struck a deal with the French government under which it will pay 23.5% of its pretax profits over a period of eight years beginning in 2005.
In explaining its decision, the commission said Bull's markets shares were very small, particularly compared with those of IBM, Hewlett-Packard and Sun Microsystems. It also said that the aid had been limited to the "minimum necessary" and would not provide Bull with surplus cash to go on a buying spree.
Bull has been in financial difficulties since the late 1990s. In 1999 it was forced to sell off assets, and its position deteriorated further in 2001 with the collapse in technology stocks and the telecommunications industry.
Simon Taylor writes for IDG News Service