Distressed Fund
THE IDC SET ASIDE R2,5 BILLION TO SUPPORT COMPANIES IN DISTRESS
The fund aims to assist companies that are in distress resulting from the COVID-19 pandemic. The fund provides affordable business loans to IDC clients and other businesses operating in sectors within the IDC’s mandate. The funds available include R 300 million ring-fenced for the Small Industrial Finance Distressed Fund which provides support for small businesses.
WHO MAY APPLY FOR THE DISTRESS FUND?
IDC clients and other businesses operating in sectors within the IDC’s mandate that, as a direct or indirect result of the COVID-19 pandemic, are:
- Reasonably unlikely to be able to pay all their debt as it becomes due and payable
- Unable to fund their operating activities
SECTORS COVERED
Agro-processing and Agriculture
Machinery, Equipment & Electronics
Chemicals, Medical & Industrial Mineral Products
Textiles and Wood Products
Mining and Metals
Energy
Media & Audio Visual
Infrastructure
Tourism and Services
Automotive Transport and Equipment
QUALIFYING CRITERIA
- Limited to South African companies and clients
- Existing and new IDC clients in distress because of COVID-19. These should operate in sectors within the IDC’s mandate
- Companies in distress because of the COVID-19 pandemic and other prevailing economic conditions, not because of mismanagement
- Companies should demonstrate strong business fundamentals and be considered viable
- Relief is for clients in distress due to COVID-19 and other prevailing economic conditionswith a sustainable business plan
- Intervention plans must show the business case recovering within 18 to 36 months
- There must be evidence that concessionary finance will enable the business to trade out of any short- to medium-term financial crisis. IDC’s funding should only be used to fund any shortfalls
- Funding cannot be used to fund bonuses or dividends
- Must demonstrate reasonable efforts to engage other funders and shareholders must have made efforts to fund the business.
- The company’s financial needs must be in excess of assistance from the Unemployment Insurance Fund, the Compensation Fund, the IDC’s funding and any other support schemes
EXCLUSIONS
- Normal expansions
- Refinancing of existing facilities
- Share buy-backs
- Payment of non-operational expenditure, bonuses
TERMS OF FACILITY
- Debt and guarantees only (equity on a case-by-case basis)
- Scheme-related concessionary pricing
HOW TO APPLY
Complete the online form.