GE GVT Economic Stabilization Fund
On Mar. 23, GE GVT issued federal aid for companies re Covid.
- Follows GE GVT, Mar. 2020, supplementary budget 2020 approval, see #74414.
- Stabilization Fund
- GVT has activated an economic stabilization fund to support economy and secure jobs.
- In addition to KfW loan program already approved, fund enables large-scale aid with government guarantees/potential for government to take a temporary stake in firms.
- Fund Instruments
- Guaranteed €400bn to support firms in refinancing themselves on the capital market.
- Recapitalization measures of €100bn to strengthen capital/ensure company solvency.
- Also includes loans of up to €100bn, to refinance the existing KfW special programs.
- Companies must meet specific criteria to qualify: total assets of more than €43 million; sales revenues of more than €50 million; annual average of more than 249 employees.
- In order to give as many companies as possible access, the group of beneficiaries has been expanded and goes beyond EC definition for small and medium-sized companies.
- The economic stabilization fund instruments are initially limited to the end of 2021.
- Activation Measures
- The federal government will raise additional funds on the capital market as required, and use its established and reliable market access through German Finance Agency.
- Recapitalization measures can be linked to specific conditions, which can affect amount of organ remuneration, the distribution of dividends funds made available by the state.
- In order for the measures to be effective and for companies to be helped quickly and without additional red tape, some corporate law provisions have also been adapted.
||PR No 6 3/23/2020; COVID-19
||BCS; Financial; Resolution; Risk; Treasury
||Banking; Corporate; Loan; Securities
|Reg. Last Update
Last substantive update on 03/25/2020