Federal Council supports SBB to bridge liquidity shortfall
Bern, 01.07.2020 - During its meeting on 1 July 2020, the Federal Council decided to support the Swiss Federal Railways (SBB) to bridge an acute liquidity shortfall Owing to the COVID-19 pandemic, the company is temporarily in need of additional funds. For this purpose, it will be able to draw on an additional CHF 550 million in the form of a loan of up to one year at market interest rates. Previously, this limit was CHF 200 million.
The measures to combat the COVID-19 pandemic have resulted in a sharp drop in demand for public transport. Like other companies in the sector, SBB scaled back its passenger transport offering by around 25% during the lockdown. Owing to the large-scale loss of revenue in the passenger transport segment in particular, SBB has seen a sharp contraction in liquidity. The company therefore has an urgent need for additional funds.
As the owner of SBB, the Federal Council has a responsibility to avoid the company becoming insolvent. It has therefore decided to adjust the existing agreement between the Confederation (represented by the Federal Finance Administration, FFA) and SBB on the granting of treasury loans. This is a solution that can be rapidly put into action.
During its meeting on 1 July 2020, the Federal Council instructed the FFA to raise the limit set down in the agreement, which is currently CHF 200 million for credits with a term of up to one year, to CHF 750 million. Market interest rates will be charged for the short-term loans effectively drawn on the Federal Treasury. This will ensure SBB's solvency until the end of 2020.
In autumn 2020, SBB will present a new medium-term business plan for 2021-2026. This will also reflect the uncertainty surrounding the development of demand for passenger transport. It will form the basis for decision-making on further medium-term funding measures for SBB.
Address for enquiries
Philipp Rohr, Communications
Federal Finance Administration FFA
Tel. +41 58 465 16 06
kommunikation@efv.admin.ch
Publisher
The Federal Council
https://www.admin.ch/gov/en/start.html
Federal Finance Administration
http://www.efv.admin.ch
