EUR 100 million to be allocated to support large manufacturers affected by Covid-19 crisis

  • 2020-05-06
  • LETA/TBT Staff

RIGA - Up to EUR 100 million will be made available to help large manufacturers cope with the impact of the Covid-19 crisis, according to draft regulations on capital investments in companies affected by the Covid-19 reviewed at a meeting of Finance Minister Janis Reirs' (New Unity) task force to support businesses and employees on Wednesday.

The Finance Ministry told LETA that, after the regulations are adopted by the Cabinet of Ministers, an alternative investment fund will be set up that will be managed by Development Finance Institution Altum.

The purpose of the fund will be to support large companies that are economically viable and well-managed, but are experiencing temporary difficulties due to the impact of the Covid-19 pandemic, and those companies that are ready to adapt or revise their current business model as a result of the impact of Covid-19.

Public financing of the fund will amount to EUR 50 million and it is projected that private funding will also amount to EUR 50 million. The fund will invest in companies' capital, make quasi-equity investments and also invest in corporate bonds, provided that they are listed on the Nasdaq Riga stock exchange.

According to the Finance Ministry, the maximum amount of the fund's investments in one company will not exceed EUR 10 million, and the fund will invest in about thirty large companies in total.

The fund will commence operations after the European Commission takes a decision on the fund's compatibility with the European Union internal market rules.