The EGAP will provide crisis aid of up to CZK 200 billion to large companies

7. 4. 2020

The Export Guarantee and Insurance Corporation (“EGAP”) should grant up to CZK 200 billion in guarantees for bank loans as part of another package of crisis financing. According to the latest information, applications for this form of aid could be submitted by:

• companies with more than 250 employees where
• at least 20% of sales for the last year originates from exports, even as part of sub-supplies to export companies.

The possibilities for using funds from this COVID PLUS program are also considerably wider than those from the COVID II program for small and medium-sized enterprises. Funds from the guaranteed loan may be used for:

• refinancing or restructuring an existing loan;
• a new loan to finance operating needs; or
• a new loan to finance investments or a combination of all the above.

The EGAP will provide a loan guarantee of up to 80% and although specific parameters are not yet known, according to current information it will be possible to apply for loans from CZK 5 million up to CZK 1.4 billion. The maximum amount of the loan available should be limited to 25% of the applicant’s total annual sales for 2019.

To assist our clients in applying for, and preparing and negotiating this guaranteed loan, we have a permanent bank financing expert team of extremely experienced lawyers who, also in normal situations, advise clients on many dozens of financing transactions worth hundreds of millions or several billion Czech crowns a year. In addition, we have dedicated the capacity of up to fifty lawyers and economic experts to support this team, creating a unique dedicated crisis financing team that has been able to assist nearly 200 clients in the COVID I and COVID II programs alone.

Due to the seriousness of the situation and anticipated economic and other losses to be suffered by a number of entities due to the coronavirus pandemic, we are offering our legal services to all clients and business partners at a reduced flat rate of EUR 100/CZK 2,600 effective from 16 March 2020 until the end of April 2020, except for services where more favourable terms have been previously agreed (especially in the public sector). Naturally, this preferential rate also applies to legal services related to the EGAP-guaranteed financing and other subsidized funding programs.

If you are interested, please contact us at krizove.financovani@havelpartners.cz.  If you have any specific questions, do not hesitate to reach out to the following key contacts :

• Filip Čabart, filip.cabart@havelpartners.cz
• Jan Topinka, jan.topinka@havelpartners.cz
• Štěpán Černý, stepan.cerny@havelpartners.cz

We believe that as the largest independent law firm in Central Europe, HAVEL & PARTNERS is fully equipped to deal with crisis situations in which crisis financing is an essential element. We will be happy to help you too – please do not hesitate to contact us at any time.