CSRC Opens a New Fundraising Way for VC/PE


By Jerry Liu , PEdaily.cn

 CSRC published the exposure draft for theguiding opinions on pilot bond project among innovative and startup companies. Thisindicates that VC funds are expected to issue bonds in the future.

It is worth noting that this is the firsttime for CSRC to issue an exposure draft after the implementation of the pilotproject of innovation and entrepreneurship corporate bond in 2016. In July 2016,CSRC established a cross-department special working group for the pilot innovationand entrepreneurship corporate bond. InfoVision Optoelectronics (Kunshan) Co.,Ltd. and Suzhou Derpin Medical Science and Technology Co., Ltd., both among thefirst pilot companies, issued two innovation and entrepreneurship corporatebonds through non-public offering, and planned to trade on Shanghai StockExchange.

For VC/PE, the guidance opinions bring many blockbusting welfares with significanceto be reckoned with.

First of all, the guidance opinions include clearclauses for debt-to-equity swap: innovation and entrepreneurship corporatebonds issued through non-public offering are permitted to be swapped intoequity, so as to meet diverse investment demands. Moreover, the clauses forwrapping innovation and entrepreneurship corporate bonds into equity shallcomply with relevant regulations of CSRC. After bondholders completed the debt-to-equityswap, the issuer shall not have more than 200 shareholders.

In addition, the issuers include not only innovationand entrepreneurship companies, but also corporate–type VC funds and VC firms thatspecially raise money for investment in innovation and entrepreneurshipcompanies; but the money shall be specially invested in equity of innovationand entrepreneurship companies at seed, early stage and expansion stages.

 

Member
Copyright © 2011 Limited Partners Association of China. All rights reserved