News Article

Bold plans to pursue the creation of a new £125m fund to help hundreds of smaller North East businesses were today (Tuesday November 18) backed by One North East.

The regional development agency’s board agreed in principle to One North East investing £19m to kick-start the JEREMIE fund.  In addition, the board has given the go-ahead to seek £43m worth of European Regional Development Fund (ERDF) investment to add into the same pot.

It is estimated that the JEREMIE fund - Joint European Resources for Micro to Medium Enterprises Initiative - could give 850 small to medium-sized companies access to finance over a five-year period, helping them grow and invest for the future.

The agreement in principle to invest £62m worth of One North East and European monies into the new venture capital fund allows a team of regional financial experts to open negotiations with the European Investment Bank (EIB) - the aim being to secure match funding of £63m from the EIB.

Together, the cash would create a £125m ‘super fund’ - the first venture capital fund of its type in England.

EIB representatives are in the North East today holding early talks with financial experts from North East Finance and NorthStar Equity Investors as well as One North East.
Malcolm Page, One North East Deputy Chief Executive, said: “Access to finance has never been more crucial for firms who will face challenging times as the credit crunch bites deeper.

“The JEREMIE fund will allow us to invest in smaller firms, giving them security to consolidate and plan ahead, hopefully to expand and create new jobs in the future.

“We plan to have the fund up and running by the beginning of 2010 and in the meantime are continuing to invest in the suite of already available publicly backed funds during next year to ensure that firms are able to access finance when they need it.”

One North East recently announced it will top up the North East Investment and Co-Investment Funds by a total of £6.25m to continue providing vital access to finance for growing firms during 2009.

Jason Hobbs, of North East Finance, said: “It’s critical that North East businesses have good access to investment capital to support growth. The proposed JEREMIE fund is excellent news for the region and something that will be warmly welcomed by the business community in the current climate.

“The innovative structure of the fund will allow One North East, North East Finance and their investment partners to respond to market needs by injecting finance into businesses when and where it’s needed.”

The investments made through JEREMIE would create a legacy fund which would be used to support more North East firms when it ends. The JEREMIE initiative is an EU and EIB-led project.

This new funding forms part of an extensive credit crunch support package the Agency has put in place to help firms at a time of need:

• A further £250,000 to extend the Company Rescue Pathfinder programme to help firms struggling with tax and credit issues
• An extra £1m into the innovative Energy Resource Efficiency scheme to help firms cut rising fuel bills
• An extra £2.5m into the Grant for Business Investment - helping small and medium-sized firms expand, create new jobs and safeguard existing posts
• A £1.8m support package into Business Link to provide free business health checks and a series of workshops to help firms take practical steps to deal with some of the issues they are facing.

For details on how to access the existing credit crunch support, firms should contact Business Link on Tel: 0845 600 9006.

Ends.

For further information please contact:
Gordon Arnott, PR Manager, One North East.
Tel:(0191) 229 6309   Fax:(0191) 229 6234 Mobile: 07713 317883
e-mail: gordon.arnott@onenortheast.co.uk