State provides personal guarantee of €199.5 million to secure Covid credit line for exporters
The credit line for exporting companies in the industry and tourism sector has an allocation of €199.5 million.
The state will grant a personal guarantee of €199.5 million to the Mutual Counter Guarantee Fund, in order to ensure the capital responsibilities of this Fund for guarantees provided under the “Covid-19 Economy Support Line – exporting companies in the industry and tourism sector,” reveals a Finance Ministry order published Wednesday in the country’s Official Gazette. A credit line of €199.5 million is aimed at exporting companies in industry and tourism, regardless of their size.
The line, approved by the Cabinet on November 2020, will be run by Banco Português de Fomento, has an allocation of €199.5 million, and allows for the possibility of 20% of the credit granted being converted into non-refundable funds, if jobs are maintained. European funds will support the costs.
The implementation of this line implies the granting of portfolio guarantees by the Mutual Counter Guarantee Fund – with a maximum limit of 20% of the financing amount -, and the concession of personal guarantees by the State to the Mutual Counter Guarantee Fund, successively, to assure the responsibilities coverage, solvency and regular functioning of the National Mutual Guarantee System.
And therefore, considering the “unequivocal public interest”, the minister of finance authorised the granting of the State’s personal guarantee of €199.5 million. The law allows the state to grant guarantees to the Mutual based on Guarantee Fund to cover liabilities assumed in favour of companies, whenever this contributes to strengthening their competitiveness and capitalisation, up to a limit of €1.35 billion.
“The granting of a personal state guarantee on the basis of the measure to create credit lines aims to solve the liquidity shortage faced by companies, seeking to ensure that the disruptions caused by the Covid-19 outbreak do not compromise their viability, allowing a greater volume of funding and on more favourable terms for beneficiary companies,” justifies the Minister of the Economy in the opinion sent to the Minister of Finance.
This is the second time that João Leão has granted a personal guarantee to the Mutual Counter Guarantee Fund within the Covid-19 lines. The first was given at the end of December to the “Covid-19 Economy Support Line – Assembly of Events”. A €50 million credit line aimed at micro, small, medium-sized enterprises and Mid Cap.
(Article corrected at 12h21 pm)
