The ‘president’ of the Generalitat Valenciana, Ximo Puig, has announced that the regional Administration will open a financing line to mitigate the effects of the crisis between Algeria and Spain and make it easier for Valencian companies “to continue with their activity” and that it consists in which the supervening working capital of these companies will be financed with a four-year loan with full repayment at maturity.
Puig, who has maintained contacts with the Ministry of Foreign Affairs in recent hours and this Saturday a meeting with the director of the Institut Valencià de Finances, Manuel Illueca, has stated that the situation “is of great concern to the Consell”.
In fact, according to a study by the Council of Chambers, about 1,400 Valencian companies operate in Algeria, with an impact on exports of close to 450 million. In addition, there is a permanent commercial connection by sea between Alicante and Oran.
Specifically, the IVF will finance the surviving working capital of these companies with a four-year loan with full repayment at maturity, known in jargon by the name of “bullet”. It is a “particularly attractive” design given that, as of September, many of these companies will begin to return the principal of the ICO loans, the Presidency has indicated in a statement.
In this way, the Generalitat will provide financing that companies will not have to return for four years, and will only pay quarterly interest at a rate equivalent to Euribor 1.5%. This type would be the one applied in case the operation was guaranteed by AFIN-SGR; otherwise, the interest rate would depend on the customer’s credit quality.
At the same time, the head of the Consell has announced that next week he will convene the Valencian Business Confederation (CEV) and the Council of Chambers for a meeting to “analyze the situation and the impact it may have on our economy.” Puig has contacted the presidents of both organizations, Salvador Navarro and José Vicente Morata, respectively, to make a “first assessment” for this next meeting.
The diplomatic crisis with Algeria “concerns” the Generalitat, “not only because of the importance of this market in terms of exports”, but also because “it places Valencian companies in inferior conditions compared to other international competitors in this situation supervening”.
