National Enterprise Restructuring Fund - Indirect Investments

Purposes

Supporting companies with a temporary capital or financial imbalance but with adequate prospects for future profitability, by subscribing to units or shares in Collective investment undertakings such as turnaround funds.

Who they are aimed at

The instruments of the National Enterprise Restructuring Fund are aimed at asset management companies (AMCs), managers of European Alternative Investment Funds (EU AIF managers) and investment companies with fixed capital (self-managed Sicafs), with a team track record of management in the business restructuring segment.

Investment criteria

Type of Target Collective investment undertaking: exclusively “new finance” component of Italian alternative Collective investment undertakings, including credit Collective investment undertakings, or EU AIFs.

Size and Duration of Target Collective investment undertakings:

• Amount of Collective investment undertaking: > €100m
• Duration of Collective investment undertaking: < 10 years

Investment size of the National Enterprise Restructuring Fund

• > € 30m
• <49% of the amount of the Collective investment undertakings
• Presence of 1 or more private co-investors who subscribe under the same conditions as the FNRI.

The main investment and management constraints for Target Collective investment undertakings

• Collective investment undertakings may invest through equity, quasi-equity or debt instruments
• Collective investment undertakings may invest in companies in a reversible crisis situation and which have submitted an application, or in any event have had access, to one of the procedures referred to in Art. 182-bis of the Royal Decree of 16 March 1942, No. 267, or an arrangement with creditors aimed at continuing operations
• Collective investment undertakings may invest in SpAs with registered offices in Italy, not operating in the banking, financial and insurance sector, with an annual turnover > €50m, with a temporary capital and financial imbalance, a condition normally verified with NFP/EBITDA> 4x or NFP/NOL > 2x, and with adequate profitability prospects
• Collective investment undertakings may not invest in target companies that have an overall debt exposure of more than 40% to banks or banking groups that are shareholders of the Collective investment undertaking Manager for a share exceeding 40%
• The maximum investment of a Collective investment undertaking in a single position is equal to 20% of the amount of the same and < €250m
• Governance rights of the FNRI envisaged (e.g. appointing CDP members onto committees/advisory boards, etc.)
• An annual report and detailed quarterly reports on the performance of the Collective investment undertaking is required
• Collective investment undertaking managers independently manage and select beneficiary companies and must verify, at the time of the operation and for the entire duration of the investment, the existence and maintenance of the requirements set out in the Implementing Decree and the Regulations.

The enterprises that target collective investment undertakings will invest in must engage a CDP-accredited Independent Expert to certify the restructuring plan. This will show debt sustainability and a fair value of the enterprise in accordance with article. 24.3 of the decree issued by the Minister for the Economy and Finance on 3 February 2021, no. 26. The list of accredited Independent Experts is available at the following link.

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