A €10 million aid scheme to facilitate the restructuring of SMEs in Ireland has been assessed by the European Commission and found to be in line with EU State aid rules.
aims to help SMEs in financial difficulty restore their competitiveness, whilst preserving competition in the EU's Single Market.
"Small and medium sized companies are the backbone of our economy and it is good that we have been able to endorse this Irish scheme to support SMEs that get into difficulties,” commented Commissioner Margrethe Vestager, who is in charge of competition policy. “These smaller companies employ a lot of people and this scheme should help them preserve jobs without unduly distorting competition."
Under the scheme, which will run until 2020, Enterprise Ireland will be entitled to offer restructuring support to small and medium sized companies (SMEs) in financial difficulty. In particular, the scheme will provide support if a company's failure is likely to trigger job losses. It aims to avoid situations where value-creating and viable SMEs, with the potential to restore their competitiveness, are prevented from accessing finance from credit markets.
The support will take the form of equity investments and will be available to SMEs active in all sectors of the economy, with the exception of the steel, coal and financial sectors.
What do Business Owners Need to Know?
Businesses looking to apply for the restructuring aid will need to:
- present a sound restructuring plan to ensure their long-term viability; and
- contribute at market terms to the restructuring costs - up to 40% of these costs in the case of medium-sized enterprises (up to 250 employees) or up to 25% of these costs in the case of small enterprises (up to 50 employees).
For expert legal advice on insolvency and corporate restructuring then contact our specialist commercial litigation lawyers today.