Commission approves Danish fund to enable €1.34 billion of capital support to large companies affected by coronavirus outbreak

The European Commission has approved Danish plans to set up a fund with a target size of up to DKK 10 billion (approximately €1.34bn) to recapitalize large enterprises affected by the coronavirus outbreak. The scheme was approved under the state aid Temporary Framework. Under the scheme, the support will take the form of recapitalizations, by means of acquisition of newly issued preferred shares in eligible private companies. The Commission found that the scheme notified by Denmark is in line with the conditions set out in the Temporary Framework.

The scheme targets large companies that have faced substantial reductions in revenues in 2020 and that are considered of substantial importance to the Danish economy. The Commission concluded that the measure is necessary, appropriate and proportionate to remedy a serious disturbance in the economy of a member state, in line with Article 107(3)(b) TFEU and the conditions set out in the Temporary Framework. On this basis, the Commission approved the aid measure under EU State aid rules.

Executive Vice President Margrethe Vestager, in charge of competition policy, said: “The DKK 10bn Danish fund will provide further support to large enterprises affected by the coronavirus outbreak by facilitating their access to finance. The scheme ensures that the state is sufficiently remunerated for the risk taxpayers assume and that there are incentives for the state to exit as soon as possible. The support also comes with strings attached, including a ban on dividends, bonus payments as well as further measures to limit distortions of competition. We continue to work in close cooperation with member states to find workable solutions to mitigate the economic impact of the coronavirus outbreak, in line with EU rules.”

The full press release is available online.

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