The Mezzanine/ Growth Fund (MGF) manages EUR 38.5 million in public resources from Operational Programme Innovation and Competitiveness 2014-2020 co-financed by the European Regional Development Fund. The instrument is expected to raise additional private financing of at least EUR 16.5 million.
The MGF supports the development of competitiveness among Bulgarian small and medium-sized enterprises (SMEs) at a mature stage of business development. It will provide access to alternative financing for SMEs with a growth potential planning to expand and improve their operations, enter new markets, and develop new products or services. The amount to be invested in each enterprise will range between EUR 2.5 million and EUR 7 million.
The implementation of this financial instrument will bring about increased productivity and export potential of Bulgarian SMEs. Along with the business objectives, the instrument will focus on strengthening the management capacity and corporate governance of the investees.
The MGF support will be provided in the form of equity and quasi-equity investments, most of which in the form of mezzanine financing.
Mezzanine financing is a type of quasi-equity investment between equity and debt financing. Generally, it enables enterprises to raise risk financing without necessarily having to transfer a significant portion of their equity to the new investor.
The investment term of the MGF is 5 years, with a life term of the fund of 10 years, with a possible extension for up to two years.
Current status of the instrument: Applications to participate in the public procurement procedure for a financial instrument under the Mezzanine/ Growth Fund (MGF) were opened in a public session in October 2018. The next step is to examine the applications; then, applicants that are found to be eligible will be invited to submit their initial offers.
Detailed information on the award procedure to select a fund manager for the Mezzanine/ Growth Fund. as well as the respective documentation, is available on the website of the Fund of Funds, under the heading of „Buyer Profile“, at http://fmfib.bg/bg/buyer/procedure/37