BAC Company Presentation September 2006
Contents ¨ Balkan Advisory Company Overview v BAC Service Lines v BAC References v
Overview n Whether you are participating in a privatization tender, acquiring a private company, starting a green-field project or joint venturing with a local company, you have to structure and execute the most efficient, timely and highest value strategy. Across the Balkans, Balkan Advisory Company consultants have advised on more than 150 transactions in both sell-side and buy-side situations across various industries and sectors. Company Background ¨ Established in 1998 as the investment banking arm of Europa Capital Management (ECM), a leading CEEuropan asset management house. ¨ Spun-off from ECM by the current principals in October 2000 ¨ BAC’s main office is located in Sofia. There are three regional execution offices in Belgrade, Bucharest and Skopje ¨ BAC has business development offices or associates in Athens, London, Madrid and Connecticut-U. S. A
Overview Competitive Advantages ¨ Extensive accumulated investment banking experience in European emerging markets ¨ Experienced staff recruited from Tier-1 consulting firms and investment banks ¨ Combination of extensive Western expertise and local presence and hands-on experience within South-Eastern Europe ¨ In-depth understanding and knowledge of Bulgarian accounting and financial practices and how they relate to IAS/GAAP standards ¨ Excellent knowledge of local transaction conditions, procedures and customs ¨ Local networking, contacts and relationships ¨ Local infrastructure, permanent presence and persistency ¨ Unmatched execution track record ¨ Customized and focused financial transaction-oriented advice to Governments, multinationals, local corporates and international & local portfolio investors
Service Lines n We provide services in three major service lines: Privatisation and M&A ¨ Deal screening ¨ Transaction structuring ¨ Preparation of investor documentation ¨ Pre-bidding due diligence ¨ Company valuation ¨ Preparation of privatization offers ¨ Liaison and negotiation with relevant authorities ¨ Assistance in negotiations with owners/managers of the targets ¨ Support during closure of privatization and M&A transactions Utilities and Project Finance Sectors: ¨ Electricity generation and distribution ¨ Gas and oil pipeline construction ¨ Airport construction and concessions ¨ Road construction and rehabilitation ¨ City water supply & distribution ¨ Waste management ¨ Telecommunications Services: ¨ Feasibility studies ¨ Financial structuring ¨ Research and potential projects follow-up Financial Institutions & Capital Markets ¨ Bank financial and operational due diligence and valuation ¨ New sovereign, municipal and corporate debt & equity issuance ¨ Sovereign and corporate debt restructuring ¨ Debt-to-equity and debt-totax swaps ¨ Debt buy-back ¨ Fixed income strategies ¨ Fund management ¨ Exotics receivables ¨ Other - real estate
Privatization Advisory Services (sell-side) BAC covers the full spectrum of sell-side advisory services for banks: Phase II Preparation Transaction • General support and project management Phase III • Valuation • Transaction planning and strategy • Due diligence • Financial • Legal • Operational • Preparation of teaser and Information Memorandum • Transaction documents • Marketing strategy • Investor Contact • Tender Process • Investor relations and correspondence • Market Analysis • Data Room • Review of legislation and regulation • Bid evaluation • Sale plan • PR and relations with local and international media Completion • Assistance in negotiations • Support in transaction closing
Privatisation Advisory Services (buy-side) BAC covers the full spectrum of buy-side advisory services for banks: Services General support and project management Purpose Complete the project goals when and as required • Manage the acquisition Activities team including the Client's dedicated personnel, legal advisors and auditors • Prepare all official correspondence • Arrange and schedule visits to the Companies, the Privatisation Agency and other relevant bodies and stakeholders • Ensure positive media coverage of the intentions of the potential investor • Provide local administrative support Due diligence Provide key insights for go/no go decision and for future negotiations • Verify main items of the P&L Account, Balance Sheet and Cash Flow Statement • Analyse all contingent liabilities & commitments and perform a full taxation compliance review • Summarise the key operational results and the status of the key assets of the Companies • Asses the impact of the issues identified in the legal and operational due diligence on the company’s future operations Valuation Offer preparation and negotiations support Estimate range of values for the target and for the expected return Assure successful bidding and negotiations completion • Develop a valuation model • Assist in the preparation to incorporate the major risk areas identified during the due diligence phase • Estimate the Companies’ revenue generating potential, capital investment needs and future cash flow levels under different scenarios • Identify high impact negotiations factors • Provide a range of values and suggest an initial bidding price for the Companies of the offer • Analyse the decision making process and propose a relevant communication strategy for each decision maker • Research the strategy, the strengths and weaknesses of other possible bidders for the Companies using all available legitimate sources of information • Support in closing negotiations • Post-acquisition advice
BAC References – Bulgaria Client Target Services Buy-side advisory services for Piraeus Bank, Greece for the privatisation of DSK Bank (2003) Bank Consolidation Company Sell-side services for the sale of Express Bank to Societe Generale (2000) (as a member of an HSBC-lead consortium) Private Investors Sell-side advisory services to private shareholders of Hemus Mark for sale of two minority stakes to Brevelie Urban AG, Austria (1999 and 2004) Tanweer Group Sofia chain of cinemas Buy-side advisory services for Tanweer Group, Greece for the privatisation of Sofia city chain of cinemas (2001)
BAC References – Bulgaria Client Target Services Buy-side advisory services for Europa Capital Management for the privatisation of: n Orbitel – internet provider (1999) n Pobeda biscuits factory (1999) n KAI ceramic tiles company (1998) n Damianitza winery (2000) n Rodina paper packaging company (2000) n Nikopol carton company (2000) Europa Capital Management Buy-side advisory services for Interbrew, Belgium for the privatisation of: n Kamenitza Brewery (1994) n Burgasko Pivo Brewery (1995) and for the post-privatisation acquisition of another two breweries: n Plevensko Pivo (1999) n Astika Brewery (1995) beer Beloizvorski Cement Buy-side advisory services for Holcim, Switzerland for the privatisation of Beloizvorski Cement (1997 and 2001)
BAC References – Bulgaria Client Target Services Buy-side advisory services for Norsk Hydro, Norway for the privatisation of Agropolychim - a leading fertiliser production company (1997) oil & energy, petrochemicals food processing mining and smelting Hlebna Maya AD, Rousse MDK Pirdop copper smelter Drujba Glass factory glassworks Buy-side advisory services for Puratos, Belgium for the post-privatisation acquisition of Hlebna Maya yeast factory, Rousse (2000) Buy-side advisory services for Phelps Dodge, USA and Glencore, Switzerland for the privatisation of MDK Pirdop copper smelter (1997) Buy-side advisory services for Yioula Glass, Greece for the privatisation of Drujba packaging glass factory (1998)
BAC References – Bulgaria Client Buyer Services Privatisation Agency of Bulgaria Sell-side advisory services for the privatisation of one of the leading Bulgarian confectioneries – Svoge to Jacobs Suchard (1993) Privatisation Agency of Bulgaria Sell-side advisory services for the privatisation of SZI Sofia confectionery to Nestle (1994) Privatisation Agency of Bulgaria Sell-side advisory services for the privatisation of Antibiotic Razgrad - a leading producer of generic pharmaceuticals, sold to an investment consortium led by Deutsche Bank (1997) Deutsche Bank Privatisation Agency of Bulgaria International and local investors Sell-side advisory services for the privatisation of a pool of 7 large hotels and sea-side holiday villages sold to international and local investors (1998) Privatisation Agency of Bulgaria International and local investors Sell-side advisory services for the privatisation of 13 companies for food processing and agriculture to international and local investors (1996 -1998) Mass Privatisation Programme design and Enterprise selection criteria development for the Council of Ministers of Bulgaria (1996 -1997)
BAC References – Serbia Client Target Services Exclusive sell-side transaction advisory services for the privatisation of „Duvanska Industrija Senta” Shareholding Company Lead transaction advisory to OTP bank on privatization of Jubanka. Responsibilities include assistance in valuation, due diligence, market research, bidding and negotiation strategy and support. Exclusive sell-side transaction advisory services for the privatisation of Serbia’s oldest and largest tourism and hospitality company – Putnik and the largest hotel group in Nis – Srbija Turist (2003) Pharmaceutica ls Joint buy-side transaction advisory services contract for the acquisition of one of two pharmaceutical companies Zdravlje, Leskovac and Zorka Pharma, Sabac, completed with the successful acquisition of Zdravlje, Leskovac (2002)
BAC References - Serbia Client Perfumery and Cosmetics Target Services Joint buy-side transaction advisory mandate for the acquisition of a Serbian cosmetics company Assisted Citadel in originating and securing the contract with Lukoil for buy-side advisory for the privatisation of Beopetrol (2003) Financial Due diligence of Jelen Do, a construction materials company (2003) Financial Due diligence of Polet, Novi Becej, a construction ceramics company (2003)
BAC References - FRY of Macedonia Client Target Sugar Factory 4 November, Bitola Potential investors Porcelanka, Veles Services Post-privatisation financial and operational Due diligence of 4 th November sugar Factory, Bitola (2003) Investor search and preparation of investor’s documentation (teaser, information memorandum) (2002) Financial restructuring of a major Macedonian ceramic tiles and tableware company and sell-side advisory services for the privatisation Agency of FYR of Macedonia (2000) Business valuation of Balkanska Banka, Skopie (2000) Usje Cement cement Buy-side advisory services for Holcim for the privatisation of Usje Cement factory (1998)
BAC – International Press Coverage In May 2004, BAC was a joint lead manager on the 30 million Euro corporate bond of the Bulgarian State Railways. The well-structured transaction was in the prestigious Euroweek (first page) and in IFR.
BAC Team – Previous Experience BAC consultants have worked for first-class employers in consulting, investment banking and other institutions*. . . Consulting and Auditing Investment Banking * Incorporates only the experience of the current BAC consultants Other
BAC Team – International Exposure. . . have worked and lived in countries across Europe and North America*. . . Belgium Netherlands Germany Canada Ukraine U. S. A Romania Bulgaria United Kingdom Spain Greece Serbia Macedonia * Incorporates only the experience of the current BAC consultants
BAC Staff - Educational Background. . . and have studied and obtained advanced degrees and professional accreditation from North American and European business schools and associations North America Europe
BAC Senior Management
Contact Info Balkan Advisory Company Sofia Office 87 Stamboljiski Blvd. , 1 st Floor 1303 Sofia, Bulgaria Tel: (+359 2) 981 2724; 980 3954 Fax: (+359 2) 981 7200 GSM: (+359 889) 626 741 E-mail: vladimir@bac. bg E-mail: alex@bac. bg Belgrade Office Terazije 27/I, 11000 Belgrade, Serbia and Montenegro Tel/Fax: (+381 11) 324 6913, 324 6900 GSM: (+381) 63 395 213 E-mail: radmila 5@yahoo. com For further information you may also visit our website: www. bac. bg
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