The European Commission has approved Lithuanian plans to set up a fund that 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.
Executive Vice-President Margrethe Vestager, in charge of competition policy, said: “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”.
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. Private investments will be made on different terms with respect to the State: the risk-sharing arrangements will be determined through an open, transparent, non-discriminatory call in order to minimise any possible aid to private investors.