[Newsletter n. 19]

On May 26, 2021, the Shareholders’ Meeting of Cassa Depositi e Prestiti (CDP) approved the Patrimonio Rilancio (also known as “Patrimonio Destinato”) set out by Law Decree no. 34 of 2020.
Patrimonio Rilancio is an extraordinary and temporary measure (with a deadline of twelve years, that may be extended) addressed to private Italian companies, other than those operating in banking, financial or insurance sector, with a turnover above 50 million EUR, which will be implemented through hybrid capital instruments and capital increases, with limited impact on governance.
The functioning of Patrimonio Destinato is regulated by Decree of February 3, 2021 of Ministry of the Economy and Finance (“MEF Decree”).

According to the MEF Decree, in addition to the turnover requirements, further requirements depending on the type of intervention shall be met by the applicant companies:

a)  in case of equity participation or convertible bond subscription:

  1. without intervention the company risks to lose its business continuity;
  2. the intervention is in the general (economic) interest;
  3. the company has not been able to finance itself  in the market;
  4. as of 31st December 2019, the company did not fall within the meaning of ”undertaking in difficulty” under  Article 2(18) of Regulation (EU) No 651/2014;

b)  in case of subordinated bond subscriptions:

  1. as at the date of application for the intervention, the company is not a small/medium-sized enterprise;
  2. in the period between March 1, 2020, and the date of application, the company has registered a reduction in revenues of not less than 10 percent compared with the same period over the previous year;
  3. as of 31st December 2019, the company did not fall within the meaning of ”undertaking in difficulty” under  Article 2(18) of Regulation (EU) No 651/2014;
  4. the subordinated bond loan is intended to cover investment or working capital requirements.

The Patrimonio Rilancio will have an aggregate budget of over 40 billion EUR, funded by MEF, and will be managed by CDP as an autonomous and separate asset from the assets of CDP itself. Consequently, no actions by or in the interest of CDP’s creditors are admitted on the Patrimonio Destinato, and vice versa. However, in the event that the Patrimonio is insufficient, the obligations of the Patrimonio Destinato are secured by a last-resort State guarantee.
The investments of the Patrimonio will follow a dual track: (a) on the one hand, investments will take place in the context of the so-called Temporary Framework of the European Union (in line with the measures provided for ‘State aid’) to support Italian companies affected by the coronavirus outbreak ; (b) on the other hand, interventions will take place as operations at market conditions, also through the involvement of private investors for at least 30% of the aid, towards performing companies or companies in difficulty, but not necessarily due to Covid, for the corporate restructuring purposes.
As to the application process, the applicant company shall submit a self declaration (signed by the legal representative, subject to a specific resolution of the company’s management and to the opinion of the supervisory body) certifying, inter alia: the meeting of the requirements set out by the MEF Decree; its future prospects post-intervention; its compliance with administrative titles and other authorizations necessary to operate in the relevant market, the existence of a suitable organizational, administrative and accounting structure, the absence of measures freezing funds or convicting judgments, etc. Depending on the type of intervention required, the company will also be required to provide additional statements or documents.
Due to the temporary nature of the interventions of the Patrimonio Destinato, appropriate contractual mechanisms will be in place to ensure an orderly divestment.
The beneficiary company may at any time buy back the shareholding owned by the Patrimonio Rilancio at the higher between the market value at the time of repurchase and the subscription price of the instrument increased at the interest rates set out by the MEF Decree and by 200 basis points until the seventh year after the intervention or conversion. The 200 bp increase will not apply as of the eighth year.

The Patrimonio Destinato is divided into sub-funds:

  1. National Temporary Support Fund (Fondo Nazionale Supporto Temporaneo – FNST): intended to temporary interventions in healthy companies that have suffered the impact of the Covid-19 outbreak, in accordance with the “Temporary Framework” adopted by the European Commission.
  2. National Strategic Fund (Fondo Nazionale Strategico – FNS): envisaging direct and indirect investments, with the involvement of other market investors, in companies with solid growth chances, in order to support their development plans.
  3. National Fund for Company Restructuring (Fondo Nazionale Ristrutturazioni Imprese): dedicated to investments at market conditions in companies with temporary financial and equity imbalances and adequate profit-generating prospects, in co-investment with other market players and also through indirect investments with the involvement of turnaround funds.

Legália will monitor the further developments concerning this matter and will keep you posted. Meanwhile, please do not hesitate to contact us for any further clarification on this and related topics.


Vito Vittore

Elena Pagnoni

Massimilianno Silvetti 

Roberta Talone