Gov't plans 100 billion won venture fund

The government is expected to provide domestic venture companies with 100 billion won in emergency financing.

The Ministry of Commerce, Industry and Energy has decided to create a merger and acquisition fund of 100 billion won for small and mediums-sized ventures together with venture capital companies. The venture industry, which is suffering from serious financial difficulties, is required to sharpen its competitiveness through restructuring and M&A.

Minister Kim Young-Ho of Commerce, Industry and Energy held a meeting with representatives of venture companies and venture capital firms, including Venture Company Association chairman Chang Heung-Soon, to study ways of injecting vitality into venture businesses.

The M&A fund announced by the ministry will be comprised of 20 billion won in state money and 80 billion won in private venture money. The fund will be utilized to acquire venture companies with poor business capability or that are shifting their businesses.

The fund will be operated by an investment club that will be created by a restructuring management company to be designated by the ministry and a private company. It will be used to promote voluntary restructuring of venture companies, thus sustaining a healthy venture boom.

For activation of an M&A medium market, the ministry plans to set up a Venture Company M&A Support Center at the Korea Technology Exchange and to form a comprehensive network among relevant organizations.

In addition, it will form a globalization support group for venture companies, which will be led by the head of the Small Business Administration, for providing intensive financial aid to selected companies to help their overseas operations.

Currently, the ministry`s real-time venture information service is limited to Silicon Valley, but it will be expanded to China and Europe. Also, the Korea Venture Promotion Foundation will be established under the initiative of the Korea Venture Company Association to support domestic venture companies for mutual exchange among venture companies at home and for their advancement into overseas markets.

At the same time, the ministry plans to hold a national conference of venture companies in September to spread the venture boom and to head off anti-venture sentiments.