BNDES: Announcement of emergency measures
As an attempt to mitigate the impacts of the Covid-19, the Brazilian Development Bank (BNDES) approved, last Sunday (March 22), an emergency package representing a potential injection of capital in the economy of R$55 billion, which amount corresponds to nearly the total disbursements made throughout last year.
It is expected that the foregoing package will benefit up to 150,000 companies in a variety of sectors that employ over 2 million people.
The package consists of the following main measures:
- R$ 20 billion will be transferred from the PIS/Pasep Fund to the Unemployment Severance Fund (FGTS) for withdrawal by employees;
- R$19 billion in suspension for 6 months (standstill) of principal and interest payment obligations under direct loans with BNDES, to be capitalized into the outstanding balance of the loan. The total loan tenor will not change;
- R$11 billion in suspension for 6 months (standstill) of principal and interest payment obligations for indirect loans with BNDES (onlending through accredited commercial financial institutions), to be capitalized into the outstanding balance of the loan. The total loan tenor will not change;
- R$5 billion for the increase of the credit line (through accredited commercial financial institutions) to micro, small and medium-sized companies (with revenues of up to R$300 million per year). The credit limit for each beneficiary is of up to R$70 million and it does not require the beneficiaries to specify the allocation of funds. Grace period of 24 months and total loan tenor of 60 months.
Measures have been announced for specific sectors, such as aviation, and it is expected that new packages will be soon announced for other sectors, such as hospitality and gastronomy.
Our practice of Project Finance, Credit Operations, Banking Law and Capital Markets will be available for any clarification required and to assist in respect of the above measures.