Opportunities for Italian companies: the SupportItalia SACE Guarantee and the simplified access to SACE Guarantee
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The recent conflict in Ukraine is affecting the entire global economy and causing severe consequences for many Italian companies.
To address the current scenario, the Italian legislators introduced:
(i) a specific first demand guarantee scheme to support businesses adversely affected by the Russian-Ukrainian crisis and the related increase of energy costs (the so called SupportItalia SACE Guarantee)1; and
(ii) new measures to simplify access to the SACE Guarantee
The SupportItalia SACE Guarantee Scheme
SACE S.p.A. ("SACE"), the Italian export credit finance agency, makes available, until 31 December 2023, first demand guarantees in favor of any banks, national and international financial institutions and other authorized lenders in Italy, to support the injection of liquidity into Italian companies affected by the Russian-Ukrainian crisis and the related increase of energy costs.
In particular, borrowers affected by cost increases or interruptions in their supply chain, can request a SupportItalia SACE Guarantee to secure any form of financings, including credit facilities, to fund the import of alternative raw materials or productive instruments.
Beneficiaries: a SupportItalia SACE Guarantee can be requested by companies that:
(i) have their registered office in Italy;
(ii) as of 31 January 2022, were not classified as an "undertaking in difficulty" (impresa in difficoltà) and whose liabilities, are not classified as "non-performing"; and
(iii) are not - directly or indirectly – targeted by any sanctions imposed by the European Union; and
(iv) are not controlling, or controlled by, directly or indirectly, companies located in a non-cooperative jurisdiction for tax purposes.
Purpose: a SupportItalia SACE Guarantee can cover financings granted for the sole purpose of covering personnel costs, investments and working capital related to operations located in Italy, rents and costs for rental of a going concern.
Guaranteed amount: the SupportItalia SACE Guarantee can cover up to certain percentage of the principal amount of the financing, which varies according to the size of the borrower2.
Conditions: the granting of a SupportItalia SACE Guarantee is subject to the following conditions:
- Maximum duration: Up to eight year maturity; Pre-amortization (preammortamento) period of 36 months permitted.
- Maximum size of the financing: the aggregate amount of all financings3 granted to the same entity backed by a state guarantee cannot exceed the higher of:
- 15% of the average beneficiary’s annual total revenue (fatturato annuo totale medio) in relation to the past three financial years; or
- 50% of the costs incurred for energy sources in the twelve months preceding the month of the request of the financing.
Evidence of liquidity needs: the borrower applying for the SupportItalia SACE Guarantee has to file an affidavit to attest that it has suffered negative economic consequences attributable to the Russian-Ukrainian crisis. If requested by SACE, the company shall provide evidence of the impact of such negative consequences on its financial results.
The procedures to obtain the SupportItalia SACE Guarantee
The procedure to obtain the SupportItalia SACE Guarantee varies depending on the size of the borrower and of the financings.
The simplified procedure is applicable to Companies with fewer than 5,000 employees in Italy, with annual revenues not exceeding €1.5 billion, or, in any case, for financings with a maximum guaranteed amounts of up to €375 million. The prospective lenders verify the eligibility criteria of the borrower, carry out credit investigation and, in case of a positive outcome, submit the application for the SupportItalia SACE Guarantee. SACE then processes the application and the loan guaranteed by the SupportItalia SACE Guarantee is granted within 30 calendar days from the relevant approval.
The standard procedure is applicable to all companies exceeding the above thresholds. In addition to the steps of the simplified the simplified, it also requires an enhanced interaction with SACE, which will be significantly involved throughout the financing approval process and the approval by the Ministry of Economy and Finance.
Simplification of the SACE Guarantee
With the so called Decreto Aiuti-ter4, the Italian legislators also simplified the requirements to access the SACE Guarantee by no longer requiring the occurrence of a contraction of demand or production as a condition to access the SACE Guarantee;
(i) extending the scope of the eligible liquidity needs to include the need to provide collateral for energy trading activities; and
(ii) providing for the issuance of the SACE Guarantee free of charge, upon occurrence of certain conditions.
These amendments will enter into force once approved by the European Commission, timing for such approval is not currently foreseeable.
The SupportItalia SACE Guarantee may become, in the short period, also cumulatively with the SACE Guarantee, a key tool and opportunity for Italian companies to manage liquidity and cash flow which suffered from negative economic consequences attributable to the Russian-Ukrainian crisis.
Companies should carefully consider the opportunities presented by the SupportItalia SACE Guarantee which is due expire on 31 December 2023, as recently extended by the so-called Aid-quater Decree5.
1 Law Decree no. 50 of 17 May 2022, (the so called "Aid" Decree ("Decreto Aiuti")), subsequently converted into Law No. 91 on 15 July 2022, as amended by (i) Law Decree No. 144 of 23 September 2022 (the so called "Aid-ter" Decree ("Decreto Aiuti-ter")) subsequently converted into Law No. 175 on 17 November 2022; and (ii) Law Decree No. 176 of 18 November 2022 (the so called "Aid-quater" Decree ("Decreto Aiuti-quater")).
2 The maximum loan percentage covered by a SupportItalia SACE Guarantee shall be equal to:
• 90% of the principal amount of the financing for companies (i) which employ fewer than 5,000 persons in Italy and (ii) which have annual revenues lower than €1.5 billion as of the date of request of the SupportItalia SACE Guarantee, and, in any case , for energy-intensive companies managing industrial plants of national strategic interest, as identified pursuant to Article 10, paragraph 1 of Law Decree no. 21 of 2022, converted, with amendments, by Law No. 51 of 2022;
• 80% of the principal amount of the financing for companies which employ more than 5,000 persons in Italy or which have annual revenues between €1.5 billion and €5 billion; or
• 70% of the principal amount of the financing for companies which have annual revenues higher than €5 billion.
3 Including aid measures granted pursuant to the implementation of the European Commission Communication of 23 March 2022 and Communication of the European Commission of 19 March 2020.
4 Law Decree No. 144 of 2022 of 23 September 2022 (the so called "Aid-ter" Decree ("Decreto Aiuti-ter")) subsequently converted into Law No. 175 of 17 November 2022.
5 Law Decree No. 176 of 18 November 2022 (the so called "Aid-quater" Decree ("Decreto Aiuti-quater")).
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