Italy: Urgent measures to support the liquidity of enterprises & export

On 6 April 2020, urgent measures to sustain the liquidity of enterprises and export have been passed, in order to guarantee the necessary liquidity to the enterprises residing in Italy and affected by the epidemic Covid-19.

Temporary measures for support of enterprises’ liquidity

First of all please note that the effectiveness of the newly introduced measures to support liquidity need the approval of the European Commission: we really hope for a short term approval!

The vehicle by which the Italian Government intends to direct such liquidity support is SACE S.p.A., a governmental company operating in the export financing.

SACE S.p.A., through the banking and credit system, will grant guarantees for any kind of financing applied for by enterprises having registered office in Italy, up to a total amount of Euro 200 billion, of which at least Euro 30 billion in favour of small and medium enterprises.

The guarantees of SACE S.p.A. will be issued on the following conditions:

a) the guarantee shall be issued within 31 December 2020 (and therefore in relation to financings started within such term) for financings with a maximum duration of 6 years, with the possibility for enterprises to claim a pre-amortisation period of up to 24 months;

b) as at 31 December 2019, the company requesting the financing did not fall into the category of companies in difficulty under Commission Regulation (EU) No. 651/2014 of 17 June 2014, and as at 29 February 2020 the company was not included in a bank's non-performing loans as defined by European law;

c) the amount of the secured loan shall not exceed the greater of the following elements: 

•  25% of the company's annual turnover for 2019, as shown in the approved financial statements or in the certified data if the company has not yet approved the financial statement;
• double of the company's personnel costs in 2019, as evidenced by the approved financial statements or the certified data if the company has not yet approved the financial statements; if the company started its activity after 31 December 2018, reference shall be made to the estimated personnel costs for the first two years of activity, as certified and declared by the company's legal representative.

d) the guarantee covers defaults on financing on an equal and pro rata basis between the guarantor and the beneficiary as follows:

• 90% of the financing amount for companies with less than 5,000 employees in Italy and a turnover up to Euro 1.5 billion;
• 80% of the financing amount for companies with a turnover between Euro 1.5 and Euro 5 billion or with more than 5,000 employees in Italy; 3) 70% for companies with a turnover of more than Euro 5 billion.

• a guarantee covering 100% of the lending up to Euro 25,000 granted by the banks without any credit assessment (lending may amount up to Euro 35,000 if a guarantee cooperative, e.g. CONFIDI/GARFIDI, is involved in the operation); 
• a guarantee covering 100% of the lending in favour of SMEs with a turnover up to Euro 800,000 and up to an amount of 15% of the turnover, i.e. up to a maximum amount of Euro 120,000 (in this case the governmental guarantee fund will carry out a credit assessment); 
• a guarantee covering 100% of the lending is planned for the coverage of new financings in favour of enterprises with revenues of up to Euro 3,200,000, up to the minor amount between 25% of the turnover and Euro 800,000. In this case no credit assessment by the governmental guarantee fund is necessary, but a 100% coverage can be achieved only with the combination of a 90% governmental guarantee and a 10% CONFIDI/GARFIDI guarantee.

Please note that in case of operations for which banks or credit institutions have agreed, at their own account and due to the effects of the Covid-19 epidemic, the suspension of the amortisation instalments or the deferral of the only capital instalments or an extension of the financing, the duration of the previously released guarantee by the governmental guarantee fund shall be extended accordingly.

For further information, please contact:

Hugo Perathoner, Partner

Bureau Plattner, Milan & Bolzano

e: hugo.perathoner@bureauplattner.com 

t: +39 0471 222500

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