Grant Thornton – National Recovery Plan: Funding Opportunities and Opportunities for Participation Funds

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Grant Thornton presented a study on how funds from the Recovery Fund can finance the investment plans of the funds and what multiplier effects this has on the economy.

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According to the relevant study, the domestic economy is expected to be strengthened by the utilization of the Recovery and Durability Mechanism.

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In particular, regarding the Recovery and Durability Mechanism, he talks about:

– Reconstruction of the economy from discrete fund resources (Recovery & Resilience Fund (RRF))
Emphasis on the green and digital transition and the transformation of the economy
– Strengthening growth potential and creating new jobs
– Total investment resources: € 31 billion.
– Subsidies: € 18.4 billion (60%)
– Loans: € 12.7 billion (40%)
– Objective to complete the legal commitments by 31/12/2023 (grant component) & obligation to disburse all resources by 31/12/2026

Grant Thornton - National Recovery Plan: Funding Opportunities and Opportunities for Participation Funds

Continuing, the study analyzes how private and public investment mobilized by the Recovery and Sustainability Fund will lead to multiplier benefits to the economy:

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Loan resources will be channeled into a specific funding scheme to finance eligible costs, the Grant Thorton study notes.

For funding parameters and funding scheme, note:
– RRF loan – ≤ 50%
– Commercial loan – ≥ 30%
– Equity – ≥ 20%

It is stressed that the loans that will be disbursed through the Recovery and Resilience Fund can have any legal form, including bond loans.

Proposals must meet the criteria and requirements set out in the relevant call instructions. Indicative:
– Expenses for acquisition and use of fixed assets
– Expenses for acquisition, use and configuration of fields
– Payroll costs associated with the investment plan
– Expenditure related to travel (expenses), third party services, consumables
and operating expenses
– Cost of capital
– Capital
– Promotion and communication costs

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The implementation of the Recovery and Sustainability Fund mechanism will create new investment and financial opportunities, the study adds, referring in particular to:

1. Creating more investment opportunities and further investment opportunities in diversified portfolios
2. Creating growth opportunities in various fields of activity through the implementation of investments based on the pillars and priorities of the RRF
3. Increase mergers and acquisitions in the domestic market and create incentives to increase business size
4. Creating more needs for liquidity, especially by small and medium enterprises, in order to implement their investment plans
5. Achieving economies of scale by companies through the development of vertical activities and the adoption of modern and innovative systems
6. Implementation of investments in order to strengthen the presence of companies in the domestic and international markets

Finally, the study notes that the financial involvement of the Participation Funds in the RRF mechanism is expected to bring benefits to companies at the level of …

-Liquidity
Ιση Securing the required funds for
financing of RRF investment projects
✓ Increase of Equity of companies
– Corporate governance
. Participation in key decision making
✓ Audit of the board of directors of companies
portfolio
. Strengthening corporate governance
– Strategic development
Θο Defining an effective plan
development strategy
Ποίηση Optimization of promotion strategy
products / services
– Efficient operation
. Better guidance and support
executives
Adoption of innovative systems and
procedures

Οποία which are ultimately estimated to lead to high returns of the Participation Funds:

– Initiation of an agreement – Identification of attractive entry possibilities (“entry valuations”)
– Value creation – Increase business revenue and operating profit
– Exit strategy – Identify optimal exit time (“Exit Revenue / EBITDA multiples”
– Returns of Funds – Increase of rate of return (IRR) of Participation Funds
Achieving high returns of Holding Fund portfolios

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It is noted that the attached study that you can see in detail in the right column “Relevant Archives”, was presented in a closed meeting, which took place two weeks ago in Athens, and which was organized by the Hellenic Development Investment Bank (EATE – former TANEO). The meeting was attended by managers from funds, which are active in Greece.

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Source From: Capital

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