The JEREMIE programme in AUVERGNE BRUSSELS 11 May 2011

The JEREMIE programme in The JEREMIE programme in AUVERGNEAUVERGNE

BRUSSELS BRUSSELS 11 May 201111 May 2011

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• Determines the investment strategy• Checks the implementation of the programme

JEREMIE Steering Committee JEREMIE Administrator• Advises the Steering Committee

• Selects Fund BeneficiariesFrameworkFinance

Agreement

Only the Auvergne Region is authorised to pay in to the

JEREMIE fund

The Auvergne Region pays the ERDF grant + its own contribution (7.2 million euros) into the

JEREMIE fund

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Businesses are financed by financial intermediaries that

receive funds from JEREMIE

JEREMIE AuvergneProfit-Sharing Fund

€25.2 million over the period2007-2013

SOFIMAC Partners carries out the operations concerning the JEREMIE profit-

sharing fund

JEREMIE Funds are assigned to various financial intermediaries

Support forinnovation

Support for smallbusinesses

Support usingown funds

The Regional Public Body is the

programme’s managing authority

The State pays the JEREMIE ERDF amount (18 million euros) as a grant to

the Region

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STS Assets allocated and allocation forecasts for the AUVERGNE JEREMIE Venture-Capital Fund

(as of 19/11/2010) Allocation

forecastMay 2009

Allocations forecast

October 2010

Amounts allocated as of

19/11/2010

Remaining to be allocated in 2010/2011

Part 1 Support for small business

Small general financing (honour loans)

AMI JER-2009/001 BATCH 2 Structures that finance creators or buyers of traditional activities

€4 500 000* €2 771 615* €606 200 -

AMI JER-2009/001 BATCH 3 Structures that finance only buyers of businesses in all sectors of activity that require the availability of significant amounts of own funds

€2 000 000* €2 360 000* €530 000 -

Guarantee €1 000 000 €0 - - Part 2 Support for innovation Small Innovation Financing (honour loans)

AMI JER-2009/001 BATCH 1 Structures that finance creators of innovative businesses

€1 500 000* €1 594 000* €294 000 -

Seed Capital and Start-Up Capital

AMI JER-2009/002 to set up a seed fund and start-up fund for innovation

€12 500 000 €12 500 000 €12 500 000 -

Pre-Seed Fund - €500.000 - € 500.000 Part 3 Support to boost SMEs’ own fundsMezzanine Fund AMI JER-2010/001 to set up a mezzanine financing fund

(Venture-Capital Fund) (publication in June 2010)€2 000 000 €3 720.000 - €3 720 000

Small-risk-capital structures AMI JER-2010/002 to select an investment-capital company (publication in June 2010)

€500 000 €250 000 - €250 000

Management costs €1 500 000 €1 500 000 €250 000 - TOTAL €25 500 000 €25 200 000 €14 180 200 €3 000 000

*Allocations planned over 4 yearsAllocations subject to responses to calls for expressions of interest

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HONOUR LOANS AND MICROCREDITS

Contract awarded on 28 January 2010

Amounts awarded by the JEREMIE AUVERGNE Venture-Capital Fund for the years 2010/2011:

Company name Amounts awarded by JEREMIE-Auvergne (for 2010)

BATCH No. 1 Structures that finance creators of innovative businesses

AT2I+ €244 000AUVERGNE ENTREPRENDRE €50 000

TOTAL €294 000

BATCH No. 2 Structures that finance creators or buyers of traditional activities

ADIE €0AUVERGNE ENTREPRENDRE €50 000BRIOUDE INITIATIVE €25 000CANTAL INITIATIVE €82 400CLERMONT AGGLO INITIATIVE €88 600INITIATIVE CREATION HAUTE-LOIRE €70 000MONTLUÇON INITIATIVE €41 200MOULINS INITIATIVE €50 000RIOM COMBRAILLES €51 500THIERS INITIATIVE €82 500VICHY INITIATIVE €65 000

TOTAL €606 200

BATCH No. 3 Structures that finance only buyers of companies in all sectors of activity that require the availability of significant amounts of own fundsAUVERGNE ENTREPRENDRE €50 000AUVERGNE TRANSMISSION €480 000

TOTAL €530 000

TOTAL GENERAL €1 430 200

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AMI JER-2009/001 BATCHES LOT 1, 2, and 3 (consolidated)

Total amount (budget over 4 years) of the estimated allocation in May 2009 €8 000 000

Total amount (budget over 4 years) requested by nominating structures €7 020 038

Total amount (budget over 4 year) of the estimated allocation in January 2010 €6 725 615

Total amount of the 2010 allocation paid out €1 430 200

Difference to be re-allocated €1 274 385

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Amount paid by

JEREMIE AUVERGNE

Amount awaiting payment

Number of project bearers financed

by JEREMIE funding

Amount paid or awaiting payment to

project bearer

AT2I+ €244 000 6 €200 000Auvergne Transmission €480 000 12 €410 000Brioude Initiative €25 000 1 €10 000Cantal Initiative €82 400*Clermont Agglo Initiative €88 600 Initiative Création Haute-Loire €70 000 Montluçon Initiative €41 200* 2 €15 000Moulins Initiative €50 000Réseau Entreprendre Auvergne €150 000 1 €15 000Riom Combrailles Initiative €51 500Créa-Thiers Initiatives €82 500*Vichy Initiatives €65 000

TOTAL €899 000 €531 200 22 €650 000

*payments in hand

Monitoring carried out by: Auvergne Regional Chamber of Commerce and Industry (CRCIA ) Objectives: allow selected structures to increase their ability to intervene in favour of setting up / selling businesses by making honour loans

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GUARANTEE PROVISIONS

Regulatory requirements linked to ERDF funds may dissuade potential candidates (rules on the re-use of funds under article 78-7 of Regulation (EC) 1083 / 2006, modified by Regulation (EC) 846 / 2009) 1. Re-using any interest that may be generated to finance projects that come under financial engineering for the benefit of small or medium-sized businesses; 2. At the end of financing by the Administrative Body, resources to be re-used, either in a financial-engineering instrument or for the benefit of SMEs by other methods, etc.

Current practices in relation to guarantee provisions:

1. Using remuneration from guarantee deposits to finance the operating costs of their structures;

2. Permanent re-use of allocated funds, through guarantees that generate a significant leverage effect on credits allocated by their financial partners.

Consultation of regional guarantee provisions in hand, awaiting confirmation of their interest or otherwise in the JEREMIE programme, in order to consider continuing with the publication of a call for statements of interest

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JEREMIE INNOVATION 1 VENTURE-CAPITAL FUND

Set up in: December 2009

Size: 12.5 million euros

Management company: SOFIMAC Partners

Objectives: boost businesses’ own funds at the commercial pump-priming or start-up stage. For all innovative sectors.

Current make-up of the portfolio of prospects:- 15 dossiers currently being assessed;- 5 dossiers put forward to the Strategic Guidance Committee. . 3D texture modelling: investment of up to €500 000 . Electronic products: investment of up to €200 000 . Diagnosis devices for orphan diseases: investment of up to €400 000 . Electronic instrumentation: investment of up to €500 000 . Facial-recognition software: adjourned (€450 000)

Distribution by sector of the overall portfolio of prospects:- 60%: Information and Communication Technologies (ICTs);- 30%: Health and Bio-technologies;- 10%: Other (Electronics, etc.).

Specific features of the JEREMIE INNOVATION 1 fund

- 100% funded from the public purse

- Application of the progress under regime N629 / 2007- Size: below 15 million euros- Each investment is less than 1.5 million euros- A Call for Expressions of Interest showed the lack of private investors in this fund- Intervention by JEREMIE INNOVATION 1 never accounts for more than 50% of the capital of the business- Private funds are provided by other, private investment funds (leverage effect)

The ability to make provision for the fund solely from the public purse is a very significant advantage.

JEREMIE INNOVATION 1 VENTURE-CAPITAL FUND

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ALLOCATION FORECASTS

Maturation Fund: €1 000 000 (€500 000 from private funds and €500 000 from JEREMIE)

Regional think-tanks on a plan to set up a maturation fund that favours the promotion of research (intervening before the business is set up)

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Regional financing chain: Pre-set-up phase

Innovation Scholarship 1,

2, and 3 (Auvergne Regional

Council - CRA)

Mission: Finance technological

research projects (specific scientific

equipment; mission costs;

indemnity).

Regional Innovation Fund 1,

2, and 3 (CRA)

Mission: Finance:- Opportunity and structuring study;- Feasibility phase

(proof of pre-production concept);

- Developing innovation.

Profit-Sharing Seed Loan

(OSEO)

Mission: Finance all expenses of the

innovation programme to

favour later intervention by a

seed fund

Honour Loan Innovation

(AT2I+)

Seed and Start-Up Capital (JEREMIE INNOVATION 1)

Mission: Capital finance for

commercial launch and finalising R&D research (end of pump-priming /

beginning of start-up phase)

MATURATION

Post-set-up phase

Maturation Fund

- Negotiate and draw up

partnership contracts;

- Maturation of innovative projects;

-Transfer of technologies and

of know-how (licensing);- Managing Intellectual Property;

- Spinning off

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Regional think-tanks on a plant to set up a maturation fund that favours the promotion of research (intervening before the business is set up)

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Investment company (Public Limited Company)

- Boost company spin-offs by taking shares in their capital

Head of Maturation Fund

-Up-stream detection of projects and of patent potential; - Support for defining the

Intellectual Property strategy;-Support for defining the

promotional strategy;-Development strategy;

-Support the business precursor in defining its Business Plan;

-Contribute to strengthening human resources.

Business precursor (Limited Company /

Limited-Liability Company)

Start UpIndustrial

saleor

Taking a share of capital

Support

Creation Transfer

ALLOCATIONS FORECASTS



ALLOCATIONS FORECASTS



Number / year Unit amountTotal amount over 4 years

(period of investment)Exclusive patent licences (financed by precursors) 2 to 3 licences €20 000 €200 000

Licences awarded by university establishments:

Number / year Unit amountTotal amount over 4 years

(period of investment)

Acquisition of interest 1 company €200 000 €800 000

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ALLOCATION FORECASTS

Calls for expressions of interest published in June 2010. Decision at the beginning of 2010

Mezzanine fund: €3 720 000, operational in the first quarter of 2011

For selecting a management company in order to set up and manage a Mezzanine finance fund (Venture-Capital Fund).

Make a finance tool available to Auvergnat SMEs in quasi-own funds (convertible or non-convertible bonds) enabling, at a time of crisis, bank finance to be added to by means of small-scale finance (€100 000 to €300 000) to consolidate Auvergnat businesses’ own funds.

Duration: 10 years. Investment: 2010-2014. Disinvestment: 2014-2019

Number of dossiers: 12 to 14 dossiers.

Risk-capital structures: €250 000, currently undergoing analysis

For selecting one or more investment-capital companies to consolidate the own funds of Auvergnat SMEs, by means of investments of up to a range from €50 000 to €100 000.

Objective: regional development (which it is sometimes difficult to reconcile with the requirements linked to the management of investment funds).

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SPECIFIC FEATURES OF THE JEREMIE FUND FOR ERDF MANAGEMENT

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ERDF

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T The JEREMIE programme is a strand in its own right of the 2007-2014 Operational Programme

ERDF funds remain acquired by the Auvergne, and can be re-used at the end of the programme

As soon as the ERDF grant is paid in to JEREMIE, that amount counts as a paid-off expense: facility to avoid automatic decommitment

Documents

The JEREMIE programme in AUVERGNE BRUSSELS 11 May 2011