ECONOMY

Corporate debtors get better terms

corporate-debtors-get-better-terms

The government is seeking to push banks to reach sustainable arrangements for the debts of companies that are to be subsidized via the “Gefyra 2” program. The facilitating measures will be tabled in Parliament this week.

The clause that Kathimerini has seen provides for a facilitating intervention for borrowers that are consistent with repayments in the corporate support program; they will not only enjoy a 90% subsidization of their loan tranche through the Gefyra 2 program, but are guaranteed that banks will not modify the key terms of their loan contracts (concerning the capital, pricing and length of the loan) in a way that would be unfavorable to the debtor, for as long as the state subsidy lasts plus the additional six-month period of monitoring.

As for nonperforming loans, the clause allows banks to introduce additional measures such as the reduction of the interest in the repayment plan, a haircut on the capital and the penalty imposed, or an extension to the repayment period. That could apply for the entire period the subsidy program and the monitoring covers.

The subsidy period for both categories of loans (those serviced and those that are not), is eight months.