What is defined as a troubled company?

DEFINITION OF A PROBLEM ENTERPRISE UNDER REGULATION (EU) NO. 651/2014

"Troubled Enterprise" means an undertaking for which at least one of the following conditions is met:

(a) in the case of a limited liability company (other than an SME which has not completed three years since its incorporation or, in the case of eligibility for business risk financing, an SME which has not completed seven years since its first commercial sale, which meets the criteria for venture capital investment investments under due diligence by the selected financial intermediary), when more than half of its subscribed capital has been lost due to accumulated losses. This is the case when deducting the accumulated losses from the reserves (and all other items that are generally considered as part of the company's equity) results in a negative cumulative amount of more than half of the subscribed capital. For the purposes of this provision, the term "limited liability company" refers in particular to the types of companies listed in Annex I to Directive 2013/34 / EU of the European Parliament and of the Council (1), and the term "capital" may include, where appropriate: and any difference from the premium version;

(b) in the case of a company in which at least some members have unlimited liability for the company's debts (except for SMEs which have not completed three years its first commercial sale, which meets the criteria for venture capital investment investments after due diligence by the selected financial intermediary), if it has lost more than half of its capital, as shown in the company accounts, due to accumulated damage. For the purposes of this provision, the term "company in which at least certain members have unlimited liability for the company's debts" refers in particular to the types of companies listed in Annex II to Directive 2013/34 / EU;

(c) if it is a company which is subject to a collective insolvency proceedings or which satisfies the conditions of national law governing it in respect of its inclusion in a collective insolvency proceedings at the request of its creditors;

(d) in the case of an undertaking which has received rescue aid and has not yet repaid the loan or terminated the guarantee contract or which has received restructuring aid and is still subject to a restructuring plan;

(e) in the case of an undertaking other than an SME, provided that in the last two years:

the debt to equity ratio of the company is higher than 7.5 and
the financial liability ratio of the company (EBITDA interest coverage ratio) is below 1.0.