France to set up 3 billion euro company support fund

PARIS (Reuters) -France will set up a new 3 billion euro ($3.67 billion) fund to support mid-sized and large companies as they emerge from the coronavirus crisis, French Finance Minister Bruno Le Maire said on Tuesday.

The fund aims to help firms on a case-by-case basis with loans or equity injections so that businesses that were viable before the pandemic but now have strained balance sheets can get back on their feet.

“The aim is not to dilute shareholders, it’s not the state’s role to become French companies’ main shareholder,” Le Maire told a news conference.

“Our aim is to ensure the transition from the crisis so companies can rebound,” Le Maire said.

The fund is part of a series of new measures which include fast-track restructuring of small firms’ debts and giving firms more time to pay back tax arrears and payroll contributions.

French companies saw their debt surge by 230 billion euros last year – more than 10% of gross domestic product – as they took out state-guaranteed loans en masse to help cope with collapse in cashflow during the crisis.

Although many firms ended up not having to use the money they borrowed, the ministry wants to avoid a wave of insolvencies.

Among other new measures, the finance ministry is using algorithms on tax and payroll data to detect fragile firms and reach out to them early.

($1 = 0.8175 euros)

(Reporting by Leigh Thomas; Editing by Christina Fincher)