Sardinia, the second largest island in the Mediterranean Sea, is a natural and strategic gateway to the European Union, as well as a place with a rich and long history stretching back as far as the Neolithic Period.
Traditionally, Sardinia has always had close ties with both mainland Europe and North Africa.
As a part of Italy, it shares the political-economy framework of a strong, market-driven economy sustained by a diverse, well-educated, highly skilled workforce.
Over the past decades Sardinia has incubated some of the most innovative Italian telecommunications companies and it is now ready for new industrial challenges, not only in the digital field.
The island is home to one of Italy’s highly resilient Italian manufacturing industrial districts. Furthermore, in recent years, a number of successful innovative companies operating in different sectors have sprung up on the island.
This economic scenario together with its natural beauty and a rich cultural heritage make Sardinia a very attractive place to set up new businesses not only for Italian but also for foreign companies.
There are 143,000 companies operating in Sardinia, that is 86 companies per thousand inhabitants, a rate well above Southern Italy’s average, with dozens of companies particularly attractive for both national and foreign investors.
The regional government is promoting specific economic sectors which offer good opportunities for investors.
Sardinia aims to foster a high value-added economy focusing on sectors like Tourism, Agribusiness, ICT, Biotechnology, Renewable Energy as well as the logistics sector and the beating heart of this economic strategy are the Small and Medium-size Enterprises (SMEs).
Traditionally dependent on conventional bank lending, Sardinian SMEs have to face important financing restrictions for the extensive bank deleveraging and a non-bank, market-based financing structure can increase the credit flows towards these companies.
This is why the Regional Government has given full support to the financial intermediary SFIRS to create a financial structure with the main aim to streamline the financial transactions for all companies operating in the region.
There is no need to buy stocks to invest in Sardinian SMEs. SFIRS has set up new, bespoke, financial instruments – the “cambiali finanziarie” i.e. “commercial papers” or “financial bills”, as well as the so-called “mini-bonds”.
These financial products, especially designed for investors, are backed by strong collateral provided by SFIRS. These financial tools are based on a regulatory reform and fiscal advantages for SMEs.
By this means, the unlisted SMEs can issue debt traded on a multilateral system of negotiation, i.e. dedicated trading facilities such as the “ExtraMOT Pro” platform on the Italian Stock Exchange.
This platform provides the tools to help SMEs attract national and international professional investors, even if – at the moment – private investors are not allowed to invest in mini-bonds.
Those Sardinian-based companies that intend to issue mini-bonds and commercial papers are arguably the most dynamic on the market.
These companies need to be “transparent” to the investment community in terms of current balance sheets and future business plans and as a result their potential can be easily identified and unlocked by potential investors.
Mini-bonds are a direct way of lending money to a business. Typically, they have a life of five to seven years, and investors earn regular interest. At the end of the term, investors get their initial investment back plus a lump sum in interest.
The commercial papers (financial bills) are short-term securities (between 30 days and 36 months) highly suitable for companies that cannot issue bonds and are pursuing alternatives to bank borrowing.
Securities currently traded on the “ExtraMot Pro” platform have an average return higher than government and big corporate bonds.
The security for repayment of loans offered by SFIRS can cover up to 80 per cent of the securities issued by Sardinia-based companies.
There is a wide range of excellent SMEs with high growth potential operating in Sardinia and SFIRS, playing the role of lead manager for investment operations, aims to work very closely with all those companies looking to take their business a step forward (whilst leaving the choice of the advisors to the issuing company).
It is estimated that at least 20 Sardinian-based companies will already have used the aforementioned financial tools by 2016.
Latest posts by Marco Belmondo (see all)
- Alternative Investment Funds And Direct Lending For Italian SMEs - 29th April 2016
- Sardinia, Beauty And Business (And Securities) - 20th October 2015
- Ten Reasons For Investing In Italian SMEs - 5th June 2015