The impact of the health and economic crisis resulting from COVID-19 has led to the approval, since March 2020, of various economic measures aimed at protecting the productive fabric, employment and household income, in particular through various instruments to support the liquidity and solvency of companies and the self-employed.
In particular, in this context, the adoption of, among others, the following took place:
- Royal Decree-law 8/2020, of 17 March, on extraordinary urgent measures to tackle the economic and social impact of COVID-19 (the “RDL 8/2020”). RDL 8/2020 approved, among other measures, the creation of a line of guarantees on behalf of the Spanish State, of up to 100,000 million euros and channelled through the Official Credit Institute (Instituto de Crédito Oficial) (“ICO”), for companies and the self-employed, and the extension of the ICO’s net borrowing limit in order to increase the ICO lines of financing for companies and the self-employed.
- Royal Decree-law 16/2020, of 28 April, on procedural and organisational measures to address COVID-19 in the area of the Administration of Justice (the “RDL 16/2020”). RDL 16/2020 had a direct impact on the insolvency sphere, with measures that focused on making the situation of debtors in the phase of compliance with an agreement or an approved refinancing agreement more flexible.
- Royal Decree-law 25/2020, of 3 July, on urgent measures to support economic recovery and employment (the “RDL 25/2020”). This Royal Decree-law, among other measures, extends and adapts the financial support measures through the approval of a new line of ICO guarantees of €40,000 million, mainly aimed at financing productive investments.
- Royal Decree-Law 34/2020, of 17 November, on urgent measures to support business solvency and the energy sector, and on tax matters (the “RDL 34/2020”).
- Law 3/2020, of 18 September, on procedural and organisational measures to tackle COVID-19 in the field of the Administration of Justice (the “Law 3/2020”). Law 3/2020 repealed RDL 16/2020 and adapted the measures provided for therein to the health situation, extending in some cases the deadlines for their application and introducing new aspects, in the hope that by the expiry of these new deadlines all the health guarantees against COVID-19 would be in place.
On 24 November 2021, Royal Decree-law 27/2021, of 23 November 2021, extending certain economic measures to support the recovery (the “RDL 27/2021”) was published in the Official Spanish Gazette (Boletín Oficial del Estado), which extends the deadlines and modifies some of the measures approved by the aforementioned legislation.
We analyse below these measures in three blocks: (i) those aimed at extending the deadline for granting guarantees under RDL 8/2020 and RDL 25/2020, (ii) the amendment and extension of the measures provided for in Law 3/2020, both in the insolvency and corporate sphere, and (iii) those relating to the suspension of the regime for the liberalisation of foreign investments.
Extension of the deadline for the issuance of guarantees under RDL 8/2020 and RDL 25/2020
In accordance with the provisions of the first and second articles of RDL 27/2021, articles 1.2 of RDL 25/2020 and 29.2 of RDL 8/2020, respectively, are amended.
In particular, it is established that the Ministry of Economic Affairs and Digital Transformation may issue guarantees, within the framework of the two lines for an amount of up to 140,000 million euros regulated in these Royal Decree-Laws, until 30 June 2022. Previously, this period ended on 31 December 2021.
Notwithstanding the foregoing, the applicable conditions and requirements to be fulfilled are not developed, including the maximum term for the application for guarantees, which must be established by Agreement of the Council of Ministers, without the need for subsequent regulatory development for their application.
In addition, the deadline for the reimbursement by the Spanish Regions (Comunidades Autónomas) of the funds not executed from the COVID line of direct aid to the self-employed and companies has also been extended until 30 June 2022. In this light, the Spanish Regions will have an additional period to resolve the appeals of the calls already closed.
Amendment and extension of the measures provided for in Law 3/2020
In addition to the above, RDL 27/2021 establishes the following amendments to Law 3/2020:
- Firstly, the special regime for the application for the declaration of the insolvency proceedings stated in Article 6 of Law 3/2020 is amended. In particular, the suspension of the duty to apply for the declaration of insolvency proceedings is extended until 30 June 2022, as well as the obligation of the judge to admit for processing the applications for insolvency proceedings filed by creditors.
In this way, the debtor who is in a state of insolvency will not have the duty to request the declaration of insolvency proceedings, whether or not it has communicated the opening of negotiations with creditors, until 30 June 2022, inclusive.
In addition, within the same period (i.e. until 30 June 2022), the judges will: (i) not admit for consideration the applications for the necessary competition that have been submitted since 14 March 2020 and, (ii) admit for consideration on preferential basis applications for voluntary competition.
- Secondly, the suspension of the cause for dissolution due to losses is extended, modifying the wording of article 13 of Law 3/2020, so that the losses produced in financial years 2020 and 2021 will not be taken into account to determine the concurrence of the cause for dissolution provided for in article 363.1.e) of the Spanish Corporate Act (Ley de Sociedades de Capital).
Prior to the approval of RDL 27/2021, the result of the financial year 2020 was not to be considered, but the result of 2021 was to be considered. With this amendment, the exception is also extended to the financial year 2021, and the result of the financial year 2022 must be considered for the purposes of the cause of dissolution due to losses of the Spanish Corporate Act.
- Extension of the suspension of the foreign investment liberalization regime
Finally, RDL 27/2021 amends the wording of the sole transitory provision of RDL 34/2020, in relation to paragraphs 2 and 5 of Article 7 bis. of Law 19/2003. Therefore, the extension of the suspension of the liberalization regime for foreign investments is extended until 31 December 2022, in certain sectors from European Union and European Free Trade Association countries in companies listed in Spain or in unlisted companies, if the investment exceeds 500 million euros.