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

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?

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.

Renewable energies, a strategic focus for the coming decades in Spain

Spain aims to reduce carbon emissions to zero by 2050, according to the new draft climate change law, which sets out an ambitious set of targets to tackle global warming over the next 30 years. The bill is expected to be passed by the Spanish Parliament during the spring of 2021.

Photovoltaic park

The law envisages that at least 70% of the country’s energy will have to come from clean energy sources, such as wind and solar, and all new coal, oil and gas extraction projects will be banned. This bill goes hand in hand with the Paris Climate Agreement, a global framework to limit global warming to well below 2ºC, and is also expected to shape the country’s economic recovery from Covid-19.

Although the plans are ambitious, Spain has already come a long way in reorganising the electricity market in favour of renewables. Consumers have been given more flexibility to switch electricity suppliers, giving green energy companies the opportunity to offer competitive tariffs while supplying electricity from 100% renewable sources.

More recently, the removal of the controversial “sun tax” in Spain has paved the way for more businesses and households to generate their own electricity using rooftop solar panels. With more than 300 days of sunshine a year, Spain is undoubtedly the perfect place to generate electricity from solar energy.

The new legislation on solar photovoltaic panels goes even further and allows those who generate solar energy to be financially compensated for the surplus energy they produce, which can be fed into the national grid.

In addition to the legislative changes, which allow businesses and consumers to generate and consume renewable energy, the government is committed to installing a minimum of 3,000 MW of wind and solar power per year for the next ten years.

Altria Corpo is particularly active in the search for financing solutions for companies that are developing renewable energy projects. There are financial providers specialised in this type of financing, to which Altria Corpo can provide access and can facilitate the management of the entire application, analysis and due diligence process for each project.

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

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

Results of the First Alternative Finance and Fintech Business Barometer

On 28 January, AltriaCorpo presented the results of the First Alternative Finance and Fintech Business Barometer, carried out jointly with the Institute of Financial Studies (IEF).

For this Barometer, a total of 120 in-depth interviews were conducted with companies, financial institutions and alternative finance providers, who were asked about their experience and perception of the availability of credit, the outlook for 2021 and the degree of knowledge and use of alternative finance and fintech instruments.

Here is the link to the video of the presentation, and this is a summary of the main results of the Barometer:

  • All banks will tighten their lending policy and most plan to raise interest rates.
  • Alternative finance providers are divided on whether or not to tighten lending policies, and have no plans to increase interest rates.
  • The lack of awareness of alternative finance among companies is still 33%, and when it comes to fintech (a subgroup of alternative finance that offers online platforms and greater agility) this lack of awareness rises to 59%.
  • 70% of companies will actively seek financing during 2021, but 84% of them are aware that it will cost them much more than the previous year due to the shrink of bank credit.
  • The lack of awareness of alternative financing together with the high availability of bank credit in recent years are the main reasons that financial agents find to explain why the growth targets for alternative financing set by the European Union and the Capital Markets Union have not been met.