Are there any mechanisms of debt restructuring in case my company is facing a difficult economic situation?

Under Decree 43/2020, some COVID-19 specific mechanisms were adopted to mitigate the impact of the outbreak in the Country, including:

  • The creation of a framework to set-off credits with the State (but only applies to certain companies);
  • A new governance structure of a Partial Guarantee Fund will be put in place by the Ministry of Trade and SMC working with the Ministry of Finance, to guarantee the efficiency, transparency and objectivity of the allocation of its resources;
  • A strategy to reduce the costs with power of SMC will be put in place by the Ministry of Industry and Energy working with the Ministry of Finance and SEGESA;
  • A strategy to reduce the costs with internet services of SMC will be put in place by the Ministry of Transportation, Post-Offices and Telecommunications working with the Ministry of Finance and private operators;
  • A strategy to repay the financial credits of SMC will be put in place by the Ministry of Finance working with the Professional Association of Credit Institutions and micro finance representatives; and
  • Food distribution and marketing companies, as well as to those that hire new employees to comply with the measures adopted by the Health Authorities, benefit from a 100% bonus, attributed by the Ministry of Finance, applicable to social security quotas until 30 September 2020.

Other than the above mechanisms, to the best of our knowledge, no other measure has been enacted in Equatorial Guinea specifically in connection with the COVID-19 outbreak in the Country that applies to debt restructuring. Therefore, the legal framework on debt restructuring in force in Equatorial Guinea applies and any action taken should be consistent with it.

We understand however that a project to broaden the scope of the measures contained in Decree 43/2020 has been under discussion, but as far as we can determine it has not been approved yet.

 

Can I be bound to file for the company’s insolvency?

To the best of our knowledge, no specific COVID-19-related measure has been enacted in the Country in connection with insolvency proceedings. Therefore, the legal framework in force in Equatorial Guinea applies and any action taken should be consistent with it. We understand however that a project to broaden the scope of the measures contained in Decree 43/2020 has been under discussion, but as far as we can determine it has not been approved yet.

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This information is being updated on a regular basis.

All information contained herein and all opinions expressed are of a general nature and are not intended to substitute recourse to expert legal advice for the resolution of real cases.