Portugal to receive €400 million EU scheme for companies affected by Covid-19

Portugal is set to receive a €400 million EU scheme to support strategic companies affected by the coronavirus pandemic approved by the European Commision.

The new EU scheme for Portugal was approved under the State aid Temporary Framework and is included in the national Recovery and Resilience Plan.

Executive Vice-President Margrethe Vestager, in charge of competition policy, spoke on the new EU scheme for Portugal stating:

“Companies active in various sectors have seen their revenues significantly decline because of the coronavirus outbreak and the restrictive measures in place. ”

“This €400 million Portuguese scheme will enable Portugal to support these companies by helping them meet their liquidity and solvency needs and ensuring the continuity of their activities. ”

“We continue to work in close cooperation with Member States to find workable solutions to mitigate the economic impact of the coronavirus pandemic, in line with EU rules”.”

According to the European Commission the aid will take the form of (i) equity instruments (including ordinary and preferred shares), (ii) hybrid instruments (convertible bonds), and (iii) a combination of equity and hybrid instruments. The investment amount per company is in principle limited to €10 million.

Aid will be provided through the Strategic Recapitalisation Programme of the Capitalisation and Resilience Fund (“the Fund”). The Fund is managed by Banco Português de Fomento, S.A., which is the National Promotional Bank.

The purpose of the scheme is to address the liquidity and solvency needs of the beneficiaries and to help them continue their activities during and after the pandemic.

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