MADRID, July 21 (Reuters) - Spanish companies receiving government support to boost their solvency in order to weather the impact from the coronavirus outbreak will not be allowed to pay dividends, Budget Minister Maria Jesus Montero said on Tuesday.
The minister also said companies that will receive state aid will not be allowed to take on excessive risks or engage in a aggressive commercial expansion, nor will they be able to pay bonuses to members of their boards.
Earlier this month, the government approved new state-backed credit lines of up to 50 billion euros, including a 10 billion euro fund to potentially bail out companies in strategic sectors that are considered viable but are experiencing solvency problems due to the coronavirus.
The government also set a minimum threshold of 25 million euros to temporarily enter the capital of these companies affected by the COVID-19 pandemic through state-owned industrial holding company SEPI.
The new details of the Spanish fund comes as European Union leaders clinched a deal on a stimulus plan of 750 billion euros for their coronavirus-throttled economies.
The 10-billion-euro fund would only invest in companies on their request through participatory loans, the acquisition of subordinated debt or through direct acquisition of companies’ shares or capital instruments.
“Companies eligible for support from the fund have to prove that without public aid they will have difficulties staying afloat,” Montero said.
Spain, which is set to receive 140 billion euros from the EU recovery fund, of which a little more than half will be grants, is planning to use the proceeds from the aid package to encourage investment in its economy’s digital transformation, the transition into greener energy sources and education. (Reporting by Jesús Aguado; additional reporting by Emma Pinedo; editing by Ingrid Melander and Angus MacSwan)