Legislation amendments

The rules of an easy-term loan for the systemically important enterprises, approved earlier by the Order of the Government of the Russian Federation No. 582, were corrected by the Order of the Government of the Russian Federation No. 712 from 20.05.2020.

According to the amendments, not only the systemically important enterprises, but also their subsidiaries belonging to the industries the most affected by a new coronavirus infection, can now receive the easy-term loans for financing of working capital. An extensive list of such sectors was approved by the Order of the Government of the Russian Federation No. 434 from 03.04.2020. In particular, these are:

• air transportation and airports;
• road transportation;
• cultural, leisure and entertainment companies;
• health and fitness and sport organizations;
• travel agencies and other tourism companies;
• hotels and catering companies;
• establishments providing additional education and non-state educational institution;
• exhibition and conference management services companies;
• household services to population (repairs, laundry, dry cleaning, hair and beauty salons);
• public health organizations;
• nonfood retailers;
• mass media and printing establishments.

The full list called «Business entities of affected industries. Moratorium on bankruptcy» is available in the «Lists we recommend» of the Information and Analytical system Globas.

According to the new rules, the easy-term loans are available for the borrowers whose revenue reduced by more than 30% compared to the same period last year.

Besides, the maximum period for loan agreement was extended from 12 to 36 months. The effective period of promotional rates can not exceed 12 months from the date of conclusion of the agreement and end no later than December 31, 2021. This rule applies to the loans provided after April 25, 2020.

The maximum loan amount, received by the systemically important enterprise, includes the loans granted by its subsidiaries under the same state program. This also refers to the loans provided after April 25, 2020.

The maximum loan amount and promotional rate have remained the same: 3 billion RUB and up to 5% per annum respectively.

The requirements for borrowers were significantly increased:

- for the first time, a loan agreement should be concluded under this state program;

- the borrower should not be in the process of reorganization, liquidation or bankruptcy, and its activities should not be suspended;

- the borrower must be under Russian jurisdiction, and the total share of offshore participation should not exceed 50%. This requirement applies to the loans provided after April 25, 2020;

- during the interest rate financing, the borrower is required to keep the number of staff at least 90% from the number of employees as of May 1, 2020;

- before effecting a loan agreement, the subsidiary must obtain the consent from the parent company.

After the loan was received, the following restrictions are imposed on borrowers:

- loan funds should not be used to refinance previously received loans. This also refers to the loans provided after April 25, 2020;

- during the interest rate financing, the payment of dividends is prohibited, except cases provided by the separate decisions of the Government of the Russian Federation.