Mega Act (ZIUZEOP): Deferred payment of credit obligations and other liabilities (1/5)

On 2 April 2020, the National Assembly adopted an Act on the intervention measures to mitigate the consequences of the communicable disease SARS-CoV-2 (COVID-19) epidemic for citizens and the economy (Act). The Act entered into force on 11 April 2020, the day after its publication in the Official Gazette of the Republic of Slovenia.

The Act provides for the rules regarding (1) deferral of borrower’s payment obligations, (2) employment relationship and payment of social security contributions (3) health and social security, (4) enforcement, insolvency and other financial obligations, and (5) other areas of law. This section is intended for the presentation of novelties regarding rules applicable to the deferral of borrower’s payment obligation and other liabilities.

Deferral of borrower’s payment obligations

The Act is amending the Act on emergency measures on deferral of borrowers’ payment obligations (Official Gazette RS, no. 36/20; hereinafter: ZIUOPOK) which further defines the definition of the deferral of payment. Definition states that the deferral also applies to agreements which serve as collateral for a credit agreement. Furthermore, the Act also clarifies and enacts that during the deferral period a debtor is obliged to pay interest rate agreed upon when the credit agreement is concluded.

More information with respect to deferral of borrowers’ payment obligations you can read here:

In addition to the aforementioned, the Act also enacts a new measure available to borrowers based on ZIUOPOK, i.e. a state guarantee for performance of borrowers’ payment obligations with the following characteristics.

The amount of the state guarantee

The guarantee of the Republic of Slovenia shall cover 25% of the amount of deferred monthly installments which would mature within deferred period.

Please note that with respect to the borrowers, whose business activities were suspended under governmental or municipal decrees or borrowers who qualify as natural persons, the guarantee of the Republic of Slovenia shall cover 50% of the amount of deferred monthly installments which would mature within deferred period.

The state guarantee will be irrevocable, unconditional and enforceable at the bank’s first written request and shall be granted for borrowers’ liabilities in the total amount of EUR 200 million.

Guarantee for obligations arising from newly concluded credit agreements

According to the Act, the state guarantee shall also apply for those credit agreements which will be concluded during the validity of ZIUOPOK with the purpose to ensure liquidity during the epidemic.

In this case, a newly concluded credit agreement must also contain compulsory covenants such as (i) pari passu clause (i.e. bank’s claim under the credit agreement shall rank at least pari passu to all other borrower’s obligations which he entered into after the guarantee has been issued) and (ii) negative pledge clause (i.e. borrower shall not create or incur any additional security interest over its assets). Please note that, with regard to newly concluded credit agreements, the Act prohibits cross default clauses, however, an exception applies in those cases when cross default is envisaged in other credit agreements concluded between the parties.

Termination of the guarantee

A state guarantee shall be terminated in case when (i) the deferral of payment obligation has been granted contrary to the terms of the ZIUOPOK, whereas the violation can be contributed to the bank and (ii) bank fails to notify the state with regards to initiation of the borrower’s bankruptcy proceedings at least 14 days prior the expiry of the deadline to file claims.

Borrowers’ Restrictions

A borrower who qualifies as company and has been granted the deferred payment of the credit obligation in accordance with the provisions of the ZIUOPOK is prohibited to pay out any profit payments, business performance awards to members of management and employees, and payment of other financial liabilities to parent or affiliated companies or owners. The parties shall include borrower’s restrictions with the annex to the credit agreement.

Deferred payment of credits and other liabilities arising from acts regulating aid and restructuring of distressed companies and cooperatives  

In addition to deferral of borrower’s payment obligations pursuant to the ZIUOPOK, the Act also regulates a deferral of credit payments and other liabilities arising from:

  • Act Governing Rescue and Restructuring Aid for Companies and Cooperatives in Difficulty (Official Gazette RS, no. 5/17),
  • Act Governing the Rescue and Restructuring Aid for Companies in Difficulty (Official Gazette RS, no. 44/07 – official consolidated text, 51/11 , 39/13 , 56/13 , 27/16 – ZFPPIPP-G and 5/17 – ZPRPGDZT) and
  • related deferral and installment payment approved in accordance with Article 77 of the Public Finance Act (Official Gazette RS, no. 11/11 – official consolidated text, 14/13 – corr. , 101/13 , 55/15 – FISP, 96/15 – ZIPRS1617 and 13/18 ).


Eligible borrower under the Act is a company established under the law governing companies and a cooperative established under the law governing cooperatives.

Characteristics of deferral

Deferral of payment obligations shall be granted for a period of 12 months, provided that the individual payment obligation has not yet matured until the declaration of the epidemic.

Deferral of payment obligations constitutes the termination of the maturity of all obligations under a credit or other agreement for a duration of the deferral period. In this regard the parties conclude an annex to the credit agreement. The final maturity date of the credit agreement is, therefore, extended for 12 months.

Please note that credit agreements granted through public tenders by Public Funds of the Republic of Slovenia may be subject to reprogram. This measure is applicable when the borrower defaulted on his payment obligation before the declaration of the epidemic. In such case the amount of individual installment increases for applicable amount.

Borrower’s obligations

The borrower who has been granted a deferred payment is obliged to report to the competent ministry quarterly on its business position.

The competent ministry may suspend or shorten the deferral period, (i) if the borrower is found to be in breach of its reporting obligations, (ii) if its financial position improves and the conditions for deferred payment are no longer met, or (iii) if it is found that the borrower stated false information in the application.

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Law Firm Kavčič, Bračun & Partners, o.p., d.o.o

Ljubljana, 3 April 2020


All information contained herein is based on applicable law or obtained from publicly available data or other sources believed to be reliable. This document is for general information purposes only, may be subject to change and may not be used instead of a legal opinion/advice. KBP does not guarantee the accuracy of the information and shall not be liable for any damages or costs in connection with the use of, or reliance on, the information contained herein.