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Peru

Stabilisation and restructuring law in Peru

Table of contents
  1. Which financial (not tax or labour) short-term compensation schemes for immediate losses due to social distancing measures have been implemented? For which industries/sizes of business?
  2. Which medium-to long-term stabilisation measures are in place in your jurisdiction?
  3. Which measures (Guarantees, Loans, Equity Injections, etc.) are available?
  4. Have these mid- to long-term stabilisation measures already been notified with EU or other antitrust bodies?
  5. Which prerequisites are necessary to qualify for a programme?
  6. Are there any major reasons that may inhibit an applicant from successfully applying for a stabilisation measure?
  7. In an international context, are subsidiaries and branches of foreign parent/holding companies eligible to apply? For EU-States: Also for non-EU-third countries?
  8. Do your country’s stabilisation schemes foresee restrictions on use of cash/other restrictions?
  9.   How are insolvency application deadlines handled in times of Corona?
  10. How far have local insolvency/restructuring laws been changed/eased which might have an impact on international businesses?
  11.  Are there any particular Corona-related rules on cross-border insolvencies and restructurings in place in your country?
  12. Which restructuring/insolvency measures instead of a wind down are available for Corona-related restructurings of entities with an international design or background in your country?
Peru

1. Which financial (not tax or labour) short-term compensation schemes for immediate losses due to social distancing measures have been implemented? For which industries/sizes of business?

Considering the emergency situation in Peru due to Covid-19’s pandemic (the “Emergency Situation”) the Peruvian Superintendence of Banking and Insurance (“SBS”) issued the following regulation:

  • On March 16, 2020, issued a regulation that allow financial institutions, according to their own analysis, to amend loans, without considering such amendment as a refinancing in case: (i) the amendment term does not exceed 6 months from the original term and (ii) the debtor was not in default previous to the beginning of the Emergency Situation.
  • In case of loans granted to individuals (consumer credits) the financial institution is allowed to amend the loan agreements without the consent of the borrower. However, the borrower can notify the financial institution rejecting any such amendment.
  • On March 20, 2020, issued a regulation that extends the term to notify the enforcement of checks, bill of exchanges and promissory notes [títulos valores], issued in favor of financial institutions, for 30 calendar days after the respective due date in order to allow the respective financial institution to proceed with the enforcement after the Emergency Situation.

2. Which medium-to long-term stabilisation measures are in place in your jurisdiction?

On March 20, 2020, the Peruvian government issued Urgent Decree No. 029-2020 that establishes a public fund of PEN 300 million (approximately, USD 84 million) in favor of Peruvian micro and small enterprises (respectively, “MYPE Fund” and “MYPE”) to serve as collateral for their working capital credits, and also for the restructure or refinance of the MYPE’s credits.

3. Which measures (Guarantees, Loans, Equity Injections, etc.) are available?

At the moment only the measures explained above, including the amendment of loan agreements made by financial institutions and the establishment of the MYPE Fund.

4. Have these mid- to long-term stabilisation measures already been notified with EU or other antitrust bodies?

N/A.

5.Which prerequisites are necessary to qualify for a programme?

To apply to the MYPE Fund the MYPE shall be in one of the following industries or related services for such industries: production, tourism and commerce. Also, the MYPE are required to meet the following conditions: (i) had an ongoing financing (qualified as “regular”) at the time the Urgent Decree No. 029-2020 was passed and require a refinancing or (ii) requires a working capital financing following the Urgent Decree No. 029-2020.

6. Are there any major reasons that may inhibit an applicant from successfully applying for a stabilisation measure?

As already explained before, in case of the regulation that allow financial institutions to amend loans, without considering such amendment as a refinancing, it is required that: (i) the amendment term does not exceed 6 months from the original term and (ii) the debtor was not in default prior to the Emergency Situation.

7. In an international context, are subsidiaries and branches of foreign parent/holding companies eligible to apply? For EU-States: Also for non-EU-third countries?

In case the Peruvian subsidiary is a MYPE under Peruvian law, it may apply to the MYPE Fund.

8. Do your country’s stabilisation schemes foresee restrictions on use of cash/other restrictions?

Not at the moment.

9.  How are insolvency application deadlines handled in times of Corona?

In response to the emergency measures issued by the government to face Corona, our insolvency authority (Indecopi) has suspended attention to the public as of, Monday, March 16, 2020, nationwide, through March 30, 2020.

This means that, while the social isolation measures are in force, neither the head-quarters of Indecopi that operate in Lima nor the other regional offices that oper-ate in the different departments of the country will be open to public attention.

Moreover, deadlines applicable to claims, complaints, obligations, and records have been suspended.

This means that, if an ongoing period to comply with the performance of an act regarding an insolvency proceeding expires today, it should be extended to the next business day, that is, when Indecopi restarts its attention to the public.

In addition, the lack of attention to the public implies that appointments for read-ing files and the call for Creditors' Meetings for the coming days have been sus-pended.

Finally, we understand that the members of Indecopi have been organizing them-selves to use various technological means to try to avoid, as far as possible, delays in the insolvency proceedings.

10. How far have local insolvency/restructuring laws been changed/eased which might have an impact on international businesses?

As of today, the government has not amended our Peruvian Bankruptcy Law.

N/A.

According to Peruvian Bankruptcy Law, a debtor (entity domiciled in Peru) can be subject to one of the following proceedings: (i) a preventive bankruptcy proceeding (“PBP”) or; (ii) an ordinary bankruptcy proceeding (“OBP”). Please note that “Bankruptcy” is a general term used to make reference to either a reorganization or liquidation.

The PBP is conceived as a refinancing “fast track” proceeding. It can only be commenced by the debtor and applies to individuals or companies under non-critical financial distress that only need debt refinancing.

The OBP is a proceeding that leads to the debtor´s corporate reorganization or liquidation depending on the debtor’s economic and/or financial situation and the decision of creditors. The OBP may be commenced by the debtor (voluntary petition) or by one or more creditors (involuntary petition).

Any debtor can file an OBP petition and request either the reorganization or liquidation of its business if: (i) more than one third of its liabilities are due and unpaid for more than thirty (30) calendar days; or (ii) its carried losses less retained earnings exceed one third of its paid-in capital. However, a debtor is forced to request liquidation if its carried-forward losses less retained earnings exceed its paid-in capital.