The government approved the terms for a €37-million-euro loan for fuel company Alexela Grupp on Thursday. The company has already laid off approximately 100 staff.
Prime Minister Juri Ratas (Center) said at a press conference the government has approved the main terms of Alexela's working capital and capital loan.
The term of the loan issued by Kredex is up to five years, the interest is 12-month Euribor plus 2 percent per annum and the contract fee is 0.2 percent of the loan limit amount, government spokespeople said.
The loan limit can be used in installments - the minimum size of each installment is at least €5 million and the maximum size €15 million.
The loan must be secured by assets belonging to the borrower and the undertakings within its consolidation group.
Alexela Grupp CEO Andreas Laane told BNS in late May that the group is applying for a €37 million loan from the Kredex foundation to support its oil products producer Kivioli Keemiatoostus and other companies of the group.
Laane said then that the loan is needed for next year's investments. While there will be enough orders until the end of this year, the crisis will reach the industrial sector with a delay and the toughest period will not arrive until the end of 2020 or early 2021. Extremely low oil prices are also becoming a serious problem, he added.
The state has earmarked €300 million in the supplementary budget for supporting businesses of strategic importance. All support allocations exceeding €10 million must be approved by the government.
Editor: Andrew Whyte