…support to medium-sized and large enterprises affected by the coronavirus outbreak
The European Commission has approved Lithuanian plans to set up a fund with a target size of up to €1 billion that will invest through debt and equity instruments in medium-sized and large enterprises active in Lithuania affected by the coronavirus outbreak.
The scheme was approved under the State aid Temporary Framework adopted by the Commission on 19 March 2020, as amended on 3 April and 8 May 2020. Under the scheme, the support will take the form of subsidised debt instruments and recapitalisation instruments. The State will provide an initial investment of €100 million in the fund, and will guarantee bonds up to €400 million that will be issued to raise additional capital for the fund.
The State’s total investment in the fund may therefore increase up to €500 million. The fund will also aim to attract private investments for up to additional €500 million. The Commission found that the Lithuanian measure is in line with the conditions set out in the Temporary Framework.
The Commission concluded that the measure is necessary, appropriate and proportionate to remedy a serious disturbance in the economy of a Member State, in line with Article 107(3)(b) TFEU and the conditions set out in the Temporary Framework. On this basis, the Commission approved the measure under EU State aid rules.
Executive Vice-President Margrethe Vestager, in charge of competition policy, said: “This Lithuanian fund aims to unlock liquidity and capital support of up to €1 billion to Lithuanian companies affected by the coronavirus outbreak by facilitating their access to finance in these difficult times. It is the first scheme we have approved that will enable capital support to companies under the State aid Temporary Framework.
The scheme ensures that the State is sufficiently remunerated for the risk taxpayers assume, that there are incentives for the State to exit as soon as possible, and that the support comes with strings attached, including a ban on dividends, bonus payments as well as further measures to limit distortions of competition.
We continue to work in close cooperation with Member States to find workable solutions to mitigate the economic impact of the coronavirus outbreak, in line with EU rules.”
Arianna Podesta –