The health emergency linked to the coronavirus has triggered an unprecedented economic crisis, in Italy and in the world. This is clear and known to all; a little less clear is having ideas on how to get out of it. One of them offers it Assonime, the association of Italian joint stock companies, which in the meantime takes note of the fact that the Government's measures to keep businesses afloat are to be considered positive but cannot last forever. Also because increasing public debt too much today would in any case mean placing a boulder on the pace of recovery after the crisis. “Companies can initially manage the greater liquidity requirement thanks to the Liquidity Decree – claims the Assonime document -. However, it is necessary to reflect on ways to alleviate the burden of this instrument, offering companies a recapitalization tool".
The proposal is therefore to create a new subject, an investment fund with mainly public capital, which can support Italian companies in the difficult phase of economic recovery from the Covid-19 crisis through: new capital injections; new injections of liquidity, which can be transformed into capital under certain conditions; an increase in its capitalization through debt-equity swap transactions. “The intervention of the Fund – suggests Assonime – should be temporary, without voting rights or with limited voting rights aimed at preserving corporate values; exit mechanisms should be envisaged towards the shareholders themselves or towards the market. The shareholders would maintain the management of the company, but would be bound in the distribution of profits, management fees and the purchase of treasury shares”.
The size of this fund is conceivable at around 20-25 billion, and the target companies would be identified among non-financial companies with turnover exceeding 25 million or more than 50 employees, but not exceeding 5 billion in turnover. In fact, the larger ones will presumably be able to absorb the impact of the crisis with their own means through the market, while for the smaller companies there would be other tools to find. Looking at Cerved's balance sheet data, out of 720.000 active companies it turns out that for companies that did not have negative cash flows before the epidemic, the additional liquidity requirement for the crisis is estimated at around 30 billion, with a more pessimistic hypothesis which would be around 50 billion.
The technical forms through which the investment can take place should include: the subscription of capital increases; the subscription of hybrid instruments (for example equity financial instruments); the granting of loans convertible into capital instruments of the target companies. The purpose of the Fund would therefore be to support Italian non-financial companies through temporary investment in risk and quasi-risk capital, either directly or through the conversion of loans held by Italian banks. The investments are expected to be medium-term, minority investments, with the possibility of exit starting from the fifth year. Finally, the duration of the Fund would be 20 years, but it could be extended.
