We would kindly like to address the current situation in the world with the recent global challenges, how this reflects to economy in general, CROWDESTOR investors and borrowers. Therefore, we turn to you with the following statement.
Regarding global economic downturn caused by the outbreak of the novel coronavirus COVID-19. Starting from 31 December 2019 when the first case of infection with COVID-19 was reported to the World Health Organization by China, the world has experienced a very sudden, unprecedented and unexpected economic and public health crisis.
Almost every country in the world and every business sector has been affected. The travel, relocation and gathering bans imposed has almost completely stopped airline, hospitality, restaurant, educational, cultural and entertainment sectors, real estate, car manufacturers, production worldwide and the transportation industry; these are all those that with every passing day experience a complete market disruption. Consequently, these industries and companies now face serious threat to their existence. Many countries have declared a state of emergency.
Due to these reasons it is certain that current circumstances can be qualified as exceptional, border-lining force majeure events.
National governments and European Commission understand the severity of the situation and, under threat of mass layoffs, are considering measures to alleviate the situation. Governments are planning to introduce recovery packages. Financial institutions are encouraged by governments and regulators to review existing payment deadlines and allow borrowers to have a time to recover once the outbreak is over.
We live in a fundamentally connected world, we all get to experience some direct or indirect affect sooner or later and our industry is no exception to that. Even though we are inclined to recognize this situation as force majeure, we want to assure you, we keep CROWDESTOR investors best interests at heart, maintaining a reasonable and humane attitude towards economy and society and therefore, we want to act in a responsible and proactive manner addressing this situation.
At CROWDESTOR we recognize the extensive trust and loyalty we have received from our investors and borrowers throughout all this time, which is precisely why we want to be fully transparent with you now, not to promise scenarios which cannot be delivered, leave you in the dark or lose your confidence in our platform.
As you might have noticed, there are borrowers currently experiencing significant difficulties. There are restaurants closed, private educational companies without students, hotels are facing 99-100% cancellations and real estate deals are put on hold for an unknown period. We have strongly believed in our projects beforehand and we do not intend to stop doing it now; we believe it is just a timely setback.
We are completely certain that to default any of the business projects today is not an answer or in the best interests for anyone. Especially, in the current conditions where market is almost nonexistent, where it is almost impossible to sell the assets or entities for a reasonable price, or to be able to refinance them. We trust and have full confidence in our borrowers. Our borrowers fully respect their liabilities and they have no intention in not repaying their loans.
At CROWDESTOR we have evaluated to look at the bigger picture and we sincerely invite our investors to support us with this. Therefore, we have decided to set a ‘Recovery period’ on all ongoing investments for a period of 3 months.
We strongly believe defaulting projects today is not an option as it would result in big losses for all - investors, borrowers and CROWDESTOR, hereby giving 3 months to borrowers could make a significant difference - borrowers would have the time to adapt to new market conditions, to set proper recovery plans in place for repayments and to apply for State recovery aid if possible; which is in the interests of CROWDESTOR and investors.
Consequently, CROWDESTOR has decided on the following actions:
- To introduce a leniency period towards the borrowers till end of June 2020; during this time CROWDESTOR will defer any loan repayments and will not affect any liens or other securities that CROWDESTOR holds;
- In the best interests of investors, CROWDESTOR reserves rights to reconsider this decision and to effect liens it holds, this will be done in situations where CROWDESTOR will decide that the best course of action is in the best interests of investors is immediate action to enforce repayment of the debt;
- After Recovery period CROWDESTOR will use its rights in full amount in the context of loan repayments and recoveries.
Nonetheless, also during this time our platform will operate as usual, our business activities will proceed undisturbed and with no problem to preform them remotely when necessary. In case of any questions, our team will be reachable at timely manner and glad to respond.
We kindly like to remind you that CROWDESTOR is still one of the few platforms that offer you to invest in highly diverse projects from various industries, so you can build a portfolio that corresponds to your values and risk appetite.
Do not forget - markets recover, they just need time.
This is a time for smarter due diligence, diversification, trust and patience in the process for the longer term welfare, both in matters of financial standing, as well as, prosperous health.
Our mission at CROWDESTOR is to empower anyone who wants to invest their money in meaningful or financially sound future projects across various industries and geographical boundaries.