Prepared by Cristian Sgaramella, Michele Giuliani, Carolina Notario
Following the epidemiological emergency due to COVID-19, Law Decree 34/2020 was issued, containing “Urgent measures regarding health, support to work and the economy, as well as social policies (…)” (so-called “Relaunch Decree“), converted into law and subsequently amended.
The Relaunch Decree, among the other, established the Fund for the safeguard of employment levels and the business concern (the “Fund“), referring to a subsequent decree of the Ministry of Economic Development (“MED“) for the definition of criteria and methods in relation to the management and operation of the Fund.
In this context, the Decree of October 29, 2020 (“Ministerial Decree“) was therefore published in the Official Journal of December 14, 2020, No. 309.
Practically speaking, the Ministerial Decree introduced the role of the managing entity, i.e. the Agenzia nazionale per l’attrazione degli investimenti e lo sviluppo d’impresa S.p.A. – Invitalia (“Managing Entity“), which was entrusted with the entire management of the facilitating intervention and whose cost, in terms of management fee, as well as expenses related to investment and disinvestment activities, are charged to the Fund itself.
From a subjective point of view, the Ministerial Decree confirms that companies in a state of economic and financial difficulty can benefit from the subject aids where, having already started a discussion with the structure for the business crisis before the MED, are experiencing in one of the following conditions:
- they are owners of “historical trademarks of national interest“, registered before the special registry, as per art. 185 bis, Industrial Code;
- are set up as corporations, have a number of employees not less than 250 and are in a state of economic and financial difficulty;
- are holders of assets and relationships of strategic national interest, regardless of the number of employees.
It has also specified that a company is considered in a state of economic and financial difficulty when it:
- has prospective cash flows that are inadequate to meet its planned obligations on a regular basis without, however, being in a state of difficulty within the meaning of paragraph 2.2. of European Commission Communication 2014/C 249/01; or
- is in a state of difficulty within the meaning of Paragraph 2.2 of Communication 2014/C 249/01
establishing, respectively in Chapters II and III of the Ministerial Decree, the relevant procedures for the intervention of the Fund.
As far as the modalities of access to the intended aids are concerned, those who want to make use of them, are required to submit to the MED and to the Managing Entity, through an application, a restructuring program, highlighting:
- detailed information on the proposing company and its corporate structure;
- the situation of economic and financial crisis, the causes of it, the reference market and the current/prospective position of the company on the same;
- the actions that are intended to be implemented in order to sustain the continuity and restore the profitability of the company;
- the actions that are intended to be implemented in order to reduce the employment impacts related to the economic and financial crisis;
- the companies that have already expressed interest in acquiring the company or in continuing the business activity;
- the opportunities offered to the employees to submit a proposal for the purchase of the company and any other possibility for the recovery of the assets by the employees;
- the costs related to the implementation of the program.
The available financial resources, amounting to 300 million euros for the year 2020, are confirmed by the Ministerial Decree in which, however, it has been established that the overall intervention in supporting each program cannot exceed the amount of 10 million euros; this cap may be exceeded only if also the Regions or other Local Authorities participate in the restructuring. In any case, it has been specified that the Fund’s intervention is subject to the count, by the requesting company, of a significant own contribution.
In order to support the restructuring program, it has been provided for the Fund will operate through:
- risk capital interventions, modulated differently depending on the state of economic difficulty, at market conditions implemented directly by the Managing Entity, always in compliance with the provisions of the European Commission Communication (2014/C 19/04);
- the granting of non-repayable contributions commensurate with the employment commitments undertaken by the company.
(for the sake of brevity and, at the same time, thoroughness, reference is made to the text of the Ministerial Decree for further details about any type of incentives)
The Managing Entity is, among other things, required to assess the existence of the requirements for accessing to the Fund, giving priority to applications with a greater impact on employment profiles and the development of the production system.
At the end of the investigation, in the event of a positive outcome, a resolution is adopted to approve the restructuring program of which timely information is given to the MED.
For the whole period of maintenance of the participation in the venture capital and of fruition of the contributions for the maintenance of the employment levels, the company shall transmit to the Managing Entity a detailed report on the state of implementation of the restructuring program which, every six months, will report to MED about the condition of the interventions.
In any case, the MED, at every stage of the procedure, has the right to carry out sample checks and, in case of verification of non-compliance with the conditions provided by the company, to withdraw the benefits.
Furthermore, by a Minister of Economic Development’s decree a technical committee will be established before the MED, whose representatives are not rewarded, with the task of coordinating and monitoring the Fund’s interventions on the basis of the reports drawn up by the Managing Entity.
Recently, according to the provisions, by means of the decree dated January 20, 2021, the General Director of MED published some clarifications together with operational indications in relation to methods and conditions for accessing the Fund, at the same time making available the outlines for the submission of the application.
For a deeper discussion, please contact:
PwC TLS Avvocati e Commercialisti
PwC TLS Avvocati e Commercialisti