March 16, 2020 / 5:25 PM / 24 days ago

UPDATE 1-Bulgaria to provide $284 mln to support coronavirus-hit businesses

(Adds detail, background)

SOFIA, March 16 (Reuters) - Bulgaria will provide $284 million to help businesses affected by the coronavirus pandemic to service loans, the finance minister said on Monday, adding the government would also provide support to limit the numbers companies have to lay off.

The Balkan country has 62 confirmed cases of coronavirus, including two deaths.

It has imposed a state of emergency and closed schools, bars, restaurants, clubs and shopping malls. Bulgaria’s tourism sector is also facing a serious hit as holiday-makers cancel vacations.

Two large winter resorts in Pirin and the Rhodope mountains closed their ski facilities on Monday after a British tourist in the ski resort of Bansko tested positive for the virus.

“We are preparing two measures. One is linked to employment and the other is to provide buffers to companies who have credits and are concerned about servicing them in the next couple of months,” Finance Minister Vladislav Goranov said.

Goranov said the state would be willing to pay for three months 60% of the salaries of any workers companies plan to lay off as a consequence of measures to limit the virus outbreak, provided they keep them on staff. On Sunday, the government had been considering such support for only a month.

The government plans to boost the capital of the state-run Bulgarian Development Bank by 500 million levs ($284 million) to help businesses service their loans, he said.

The funds will be used to issue portfolio guarantees to commercial banks to allow them to be more flexible with companies that have difficulty servicing loans.

The bank will also be able to take temporary stakes in companies that need capital support, with a buyback option, he said. The option will be applied in cooperation with creditor banks.

“This is our short and quick answer to the challenges of the last few weeks,” he said.

$1 = 1.7613 leva Reporting by Tsvetelia Tsolova; Editing by Kevin Liffey and Barbara Lewis

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