The European Commission approved this Friday a Portuguese recapitalization plan of 400 million euros to support companies affected by the Covid-19 pandemic, with a maximum investment of 10 million euros per company until the end of June.
The European Commission has approved a €400 million Portuguese plan to support strategic companies affected by the Covid-19 pandemic. The scheme was approved under the Temporary Framework for State Aid and is included in the National Recovery and Resilience Plan. [PRR]”, informs the institution in a statement released today.
specifically, this measure aims to support the solvency of viable non-financial strategic companies active in Portugal and affected by the pandemicthus responding to its liquidity needs, with funds made available through the Recovery and Resilience Mechanism, within the scope of the Portuguese PRR.
According to information provided by Lisbon to Brussels, state support takes the form of equity instruments (including common and preferred shares), hybrid instruments (convertible bonds) and a mix of equity and hybrid instruments. The amount of investment per company is expected to be limited to 10 million euros.
The aid will be provided through the Strategic Recapitalization Program of the Capitalization and Resilience Fund, managed by the Banco Português de Fomento.
“The Commission verified that the Portuguese regime meets the conditions established in the Temporary Framework”, also concluding that “the measure is necessary, adequate and proportionate to remedy a serious disturbance in the economy of a Member State”, adds the institution to the press.
This support complies with the requirements related to the currently relaxed European rules for state aid, such as being limited to the amount necessary to ensure the viability of the beneficiaries, guaranteeing adequate remuneration to the State and encouraging beneficiaries to repay the support as soon as possible. . , provide guarantees and also because the aid must be granted no later than June 30, 2022.
Quoted in the note, the executive vice president of the European Commission with the Competition portfolio, Margrethe Vestager, adds that “this Portuguese plan of 400 million euros will allow Portugal to support these companies, helping them to cover their liquidity and solvency needs and ensuring the continuity of its activities.
Adopted in March 2020, the Temporary Framework for State Aid has expanded the support that Member States can give their economies, normally prohibited by EU competition rules, which translates into state-guaranteed loans, subsidies, among others .
Last month, the European Commission announced that, due to the improvement in the economic situation, taking into account the relaxation of restrictions due to covid-19, it chose not to extend the temporary framework beyond June with relaxation of the rules for state aid.
This means that this time frame will not be extended for most instruments after June 30, 2022; however, Member States may continue to provide specific investment and solvency support measures until December 31, 2022 and December 31, 2023.
Source: Observadora
