Altria Corpo and PKF Attest support companies in applying to the COFIDES Recapitalisation Fund

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The COFIDES Recapitalisation Fund aims to quickly and effectively strengthen and restore the solvency of medium-sized companies (between 10 and 400 million euros in consolidated turnover) in any sector which, having no viability problems prior to the COVID-19 crisis and being viable in the medium and long term, are being affected by the effects of the pandemic.

In addition, those companies that exceed 400 million euros and justify not having been able to access the SEPI Support Fund, because they do not reach the minimum amount of support provided for in this fund, may also apply for and be beneficiaries of the Cofides Recapitalisation Fund.

  • Maximum total amount to apply for:
    • Large Enterprise: between EUR 4 million and EUR 25 million per beneficiary.
  • Type of instruments:
    1. Equity instruments and/or equity hybrids (participating loans): the minimum amount necessary to ensure viability and not to improve the capital structure at 31/12/19 (measured as Equity / Net Financial Debt).
    2. Other additional credit facilities (normally ordinary loans): the most favourable amount for the company resulting from (i) 2 x annual wage costs 2019, (ii) 25% total turnover figure 2019
  • Term:
    • Equity instruments and/or equity hybrids: maximum 8 years (up to 2029)
  • Remuneration (margin):
    • Equity instruments and/or equity hybrids:
Beneficiary typeYear 1Year 2 and 3Year 4 and 5Year 6 and 7Year 8 ff
SMEs2.25%3.25%4.50%6.00%8.00%
Large companies2.50%3.50%5.00%7.00%9.50%
  • Other complementary credit facilities:
Beneficiary typeYear 1Year 2 and 3Years 4, 5 and 6Minimum
SMEs0.25%0.50%1.00%6.00%
Large companies2.50%3.50%5.00%7.00%

Such aid may be granted until 30 June 2022.

In the next post we will detail the eligibility criteria.

ESG strategy, key for medium-sized companies

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The Sustainable Development Goals (SDGs), adopted by the United Nations in 2015, cover areas such as responding to the threat of climate change, eradicating poverty, promoting gender equality and social inclusion, among others. The SDGs propose a plan to move towards a global economy that is much more responsible and inclusive of people and the planet.

The investment world, with funds that invest in companies at the forefront, is aware that it must collaborate decisively in the achievement of these SDG objectives, and it does so by applying the so-called ESG principles (E for Environmental, S for Social and G for Governance). These are non-financial criteria divided into three main groups:

  • The environmental ones, which encompass aspects such as climate change, toxic emissions or renewable energies;
  • Social criteria, such as the achievement of human rights, decent working conditions, equal diversity and access to information;
  • Corporate governance, such as putting an end to corruption, promoting business ethics or fostering transparency.
ESG criteria. Source: Rankia

Increasingly, pressure from the investment world and society in general will mean that companies will have to submit to these ESG principles if they want to obtain financing from the markets and their agents (banks, funds and investors in general). The Next Generation funds, for example, will have a strong ESG component, and more and more funds with which we collaborate at Altria Corpo are setting ESG criteria for financing medium-sized companies.

The ESG strategy is therefore absolutely crucial for companies in the coming years and is transformational in all areas of the company, so the responsibility for implementing it lies with the general management and governing bodies, and is not a matter that should be left to the marketing and communications department alone.

Altria Corpo, through its partnership with the leading PKF Attest group, can help companies to undertake the necessary ESG transformation processes from all sides:

  • Definition of the ESG strategy, with the help of specialist strategic consultants.
  • Participation in the implementation of the plans that have been defined: emission control plans, compliance, equality, conciliation, supplier management, etc.
  • Measurement of the company’s progress over time based on objective ESG indicators, and benchmarking with companies in the sector.
  • Support in obtaining an ESG certificate such as the B Corp certificate, among others.
  • Implementation of Business Intelligence solutions to measure and track ESG KPIs.
  • ESG audits

How to finance with the new Productive Industrial Investment Support Fund (FAIIP)?

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One of the novelties for 2021 is the creation of the Productive Industrial Investment Support Fund (FAIIP), with an endowment of 600 million euros, aimed at providing returnable financial support to promote industrial investments. The management of the FAIIP has been entrusted to SEPI Desarrollo Empresarial, S.A., S.M.E. (SEPIDES).

Therefore, all Spanish companies that develop or will develop a productive industrial activity and industrial services, regardless of their size, may be beneficiaries of this fund. The projects must be located in the national territory, being eligible for funding, for applications submitted in 2021, both items that have been executed since 1 July 2020, as well as those that are executed up to 2 years after the date of formalisation of the financing of the FAIPP Fund. For new projects, not yet started, the start of their implementation must be foreseen within a maximum period of 12 months.

There are three financing formulas: ordinary loans, participating loans, temporary and minority equity participation, or mixed formulas between the above, with long-term operations (up to 10 years) and high grace periods (up to 3 years in ordinary and participating loans).

Interest rates will depend on the rating of the company and type of project, the type of financial operation, and the bonus that may be established for compliance with industrial impact criteria, within the following ranges: between 1 and 4.5% for ordinary loans; between 4 and 7.5% in equity loans; and between 4.5 and 8% in equity participation.

The eligible amount of each operation is up to 75% of the project’s bankable budget, with operations ranging from 200,000 euros to 60 million euros per year.

Altria Corpo has direct contact with SEPIDES and can help industrial companies in advising and processing the best financing solution, both under this new FAIIP, as well as in the multiple alternatives that exist from alternative financing.

How will Covid-19 public financing be renegotiated with the banks?

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Last May 2021, the Secretary of State for the Economy and Business Support approved the Code of Good Practice for the renegotiation of financing guaranteed by public entities (ICO, CESCE or CERSA) on the occasion of the Covid-19 crisis.

Thus, companies that received aid in the form of bank financing guaranteed by these public entities will have the possibility to apply for one of the 3 measures made available to them:

  1. Extension of ICO loans: for two more years, so that the maximum term for loans of less than €1.8 million will be 10 years, and for loans of more than €1.8 million it will be 8 years. This extension will be mandatory for banks in cases of a decrease in sales of more than 30% in the period 2020 compared to 2019, and only optional if the decrease in turnover is less.
  2. Conversion of the financing into a shareholder loan, with maintenance of the public guarantee: in this case, a decrease in turnover of more than 30% is mandatory and the company must also have recorded losses in 2020. The refinancing of the guaranteed debt will be binding for all banks, when more than 50% of the guaranteed nominal amount supports it.
  3. As a measure of last resort, the reduction (write-down) of the principal of the financing by means of transfers by the State.

All these modalities will be implemented in the framework of an agreement to renegotiate the debt of all banks, making their best effort to include both the secured and unsecured part, generated between 3/17/20 and 3/12/21.

One or more measures may be implemented at the same time or successively. In order to coordinate the whole process between the various financial institutions, it has been stipulated that the bank with the highest risk ICO will be the coordinator of all the banks, and the company must contact it. Tranches 1 and 2 must be communicated to ICO before 12/1/21, and tranche 3 before 12/1/22. Debt secured by collateral or guarantors is excluded from these coordination rules.

Another very important point to bear in mind is that, if any of these three modalities are used, the banks undertake to maintain the working capital lines until 12/31/22. And as far as the refinancing of the non-guaranteed debt is concerned, the unanimity of all the financial institutions will be necessary.

For more details on the eligibility criteria and how the whole process works, please contact us. At Altria Corpo we can handle all these procedures and negotiations with financial institutions, as well as look for all kinds of additional financing solutions from among the more than 100 alternative financing providers to which we can provide access.

Altria Corpo strengthens its financing division with Sergi Martínez and Oriol Martí

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These incorporations consolidate the firm as a leader in Catalonia in financial consultancy for medium and large companies.

Altria Corpo has just strengthened its team in the Corporate Finance Area with two professionals, Sergi Martínez and Oriol Martí, who have in-depth knowledge of the corporate finance business in the medium and large company segment.

Sergi Martínez joins Altria Corpo after a successful 24-year career at Banco Santander, where he has held management positions in the corporate and institutional segments and led commercial teams at the bank. He is also an academic collaborator in various business schools. Sergi Martínez holds a degree in Actuarial and Financial Sciences, specialising in Business Management and Administration, from the University of Barcelona. He holds an Executive Master’s degree from EAE and has taken several specialised courses in business risk analysis.

Oriol Martí has more than fifteen years of experience in the financial sector in institutions such as Deutsche Bank and Citibank, where he has developed commercial and managerial functions within the corporate area in Barcelona, Madrid and Hamburg. He has also managed business projects in the last five years. Oriol Martí holds a degree in Economics from the Universitat Pompeu Fabra and a Master in Financial Management from ESADE.

With these additions, the Altria Corpo team now comprises eleven consultants in the Corporate Area, together with an analysis team and a team specialised in external financial management and the handling of restructuring and turnaround situations.

Sergi Martínez
Oriol Martí