The state is creating a commercial support fund: it is clear who will be able to receive support and how the fund will work

Set up two companies.

The bill presented to the Government by the Ministry of Finance last week established that the Business Support Fund would establish two state companies: the State Investment Capital and the State Investment Management Agency.

Regarding the latter, the Ministry of Finance is expected to be responsible for this.

It is stated that you will be required to prepare and sign the memorandum and statutes of the company, as well as to represent the state in the company in the implementation of the rights and obligations of property and non-property of the state as a shareholder and delegate by the state. comply with the provisions of the aid scheme.

The authorized state capital here is expected to reach less than in another company: 1 million. Eur, and the company’s shares would give the state 100 percent of the vote at the general shareholders’ meeting.

However, the Ministry of Economy and Innovation would already be responsible for the act of establishing another company, “State Investment Capital” and representing the interests of the state.

The documents indicate that of the credits approved by the Ministry, 100 million are assigned as a state contribution to the authorized capital of the company. It is explained that the company’s shares will also give the state 100 percent of the votes at the company’s general shareholders’ meeting.

As reported to the portal, procedures for establishing a business are currently underway.

He explained the procedure

The Delfi Finance Ministry agreed to provide more information on the emergence of the new fund and the decision to establish two companies.

According to the institution, the two companies will establish a limited partnership (KŪB) on a contractual basis to manage the fund and both will be its members.

“The State Investment Management Agency established by the Ministry of Finance will be a full member of the limited liability company, which will also be responsible for the management of the limited liability company, and the state investment capital company established by the Ministry of Economy and Innovation will be the commander of the fund that will provide the state contribution to the fund.

The Ministry also confirmed that, taking into account the need to ensure the necessary skills and independence of the fund, independent professionals will be invited to the management of the fund and representatives of the Bank of Lithuania (LB) will join.

When asked about the objectives of the developing fund, there are several, according to the Ministry of Finance.

This is, according to him, the provision of investments to Lithuanian medium and large companies, whose closure can cause a chain reaction and affect the entities affected and have significant socioeconomic consequences, as well as preserve important economic sectors that will be better prepared for recovery. economic.

To the objectives, and the promotion of the capital market, giving priority to capital market measures, attracting private investors.

Admittedly, it is explained that the fund will only invest in companies that have experienced financial difficulties due to COVID-19.

“Support is provided to companies that no longer have the opportunity to borrow or obtain financing from the market.

The assets of the fund may be invested in debt securities issued by legal entities, loans, subordinated loans to legal entities, equity securities issued by legal entities and financial debt instruments that have or may have equity characteristics, “the representatives explained. of the Ministry of Finance.

The planned size of the fund’s investment portfolio is also estimated to reach one billion. EUR, of which 100 million euros are planned to be allocated to the Fund from the state budget. Initial contribution of EUR and provide up to EUR 400 million. A state guarantee in the amount of EUR for non-equity securities issued to raise funds for the fund.

“The rest are private and institutional co-investors,” the ministry said.

Security against the influence of political decisions.

Although there was some doubt in the media some time ago that the companies mentioned may be related to the establishment of the state bank, which has been under discussion for some time, LB board member Marius Jurgilas confirmed that the establishment of these companies is related to the Commercial Support Fund.

As the LAC institution is also expected to participate in the management of the fund, when asked what its role would be, M. Jurgilas assured that this will aim to guarantee independent decisions.

“In order for the fund’s management structure to ensure adequate representation of investor interests, separation of activities from the influence of political decisions to ensure independent and sustainable long-term fund operations and independent decision-making by part of its investment management and decision-making bodies, the Bank of Lithuania will actively participate in the management of the fund, “he said, explaining once again that the fund is expected to provide financial assistance to Lithuanian large and medium-sized companies affected by the COVID-19 outbreak.

According to him, said fund will start operating in June.

The idea struck him as interesting.

Mantas Zalatorius, president of the Lithuanian Bank Association (LBA), has so far been cautious about the government’s decision to establish an Aid Support Fund, saying better details were needed first.

“The fund project will be presented in more detail to the Lithuanian financial community this week, when the outline of the new structure is clear.

A closer look at the fund’s strategy, governance and oversight model, and transparency standards will provide more information, “he said.

Finally, according to Zalator, the idea of ​​the fund is as interesting in itself as any other initiative to support the country’s companies and economy in the broadest sense in this period of uncertainty about the future.