Jungjingong Provides 60 Billion Won Growth-Sharing Funds to "Nurture Innovative Companies"

Up to 6 Billion KRW Support per Company... Up to 7 Billion KRW for Companies Located in Provinces
Hybrid Investment and Financing Including Direct Acquisition of Convertible Bonds and Redeemable Convertible Preferred Stocks

[Asia Economy Reporter Kim Cheol-hyun] The Small and Medium Business Corporation (Chairman Kim Hak-do, hereinafter referred to as SBC) announced on the 22nd that it will provide 60 billion KRW in growth-sharing funds this year to promising small and medium venture companies with excellent technological capabilities and business potential.

Growth-sharing funds are a hybrid investment and financing project by SBC that supports companies with high IPO potential by directly acquiring convertible bonds (CB) and redeemable convertible preferred stocks (RCPS).

Eligible applicants are small and medium venture companies with excellent technological performance, business potential, innovation, and growth potential that have not received investment from private venture capital companies. Even if private venture capital companies have invested, companies established less than 7 years ago and located outside the metropolitan area are eligible to apply.

The issuance conditions for convertible bonds are a loan period within 5 years (including a grace period of 2 years), and for companies established less than 7 years ago, 7 years (including a grace period of 4 years). The nominal interest rate is 0.5%, the maturity guaranteed interest rate is 3%, and the support limit is up to 6 billion KRW (7 billion KRW for companies located in provincial areas).

In particular, startup companies less than 3 years old have a reduced nominal interest rate of 0.25%, and the corporate valuation at the time of convertible bond acquisition is omitted and designed to be linked to the evaluation value of follow-up investments by institutional investors later, enabling rapid support.

Last year, SBC supported 70 billion KRW for innovative growth companies and non-face-to-face industry sectors. The amount of follow-up investments attracted by companies supported by growth-sharing funds was 217.8 billion KRW in 2021, and the cumulative total from 2008 to last year was 1.2 trillion KRW.

Chairman Kim Hak-do said, "This year, we plan to expand and regularly hold briefings to attract private follow-up investments for companies supported by growth-sharing funds. In addition, we plan to strengthen support for carbon neutrality of small and medium venture companies through direct financing to promising companies in low-carbon and eco-friendly fields."

This content was produced with the assistance of AI translation services.