Advent Uk Roadmap 2009

www.advent-uk.com

Guidelines for mutual successSummary1. Advent UK finance

activities and team2. Roadmap3. Understanding Western

Finance 4. Project preparation: most

important points5. What is expected from

project team6. Conclusion

Advent UK activitiesFunding

Financial NetworkInternational BanksFinancial InstitutionsInvestment FundsPrivate Equity CapitalVenture CapitalistsInternational lawyersInternational AccountancyAudit firmsTax specialist

The Projects

Advent UK team

Patricia Goodenough

President

Pierre FourèsDirector Project

Finance

Michel LubacMarketing

Director France

Ian LeapingwellBusiness

DevelopmentDirector

Joel Barlier PropertyProjects

Consultant

Rupert PotierBusiness

DevelopmentDirector

Road Map purposes•To be fully prepared to meet exacting Westernfinance requirements

•Understanding financial culture

•Preparation of project owner profile

•Project advantages/opportunities

•Building project presentation excellence

•Flexibility of financial alternatives

•Building relationships with financial partners

•Understanding of negotiation process

Road Map stages1- Familiarity with Western Finance expectations and standard procedures

2- Project owner profile and building of a project description according to Western standards

3- Financial strategy and financial syndication for the project

4- Team Setting up (Managing Team)

5- Investor search tactics & negotiations

Understanding Western Finance

Prime banksThese banks are potential lenders for corporate lending (debtfinance) and/or project finance with the period of the loan andthe interest rates to be decided according to different factors.Sometimes the banks will syndicate large loans with otherinvestors, and they expect the project owners to haveinvested over 25% into the project. They will look forguarantees against finance which could be guarantees bythe City Administration, by another prime bank, mortgage onthe land for the project, mortgage on property owned by theborrower, options on shares in the corporate structure of theborrower, and sometimes other guarantee requirements.Today there is very limited access to debt finance

Investment funds

These funds have institutional investors who have investedaccording to the Manifesto of the Investment Fund; theirmoney is raised on the Primary or Second Financial markets(AIM or Stock Exchange). The manifesto declares what theFund will invest into what is the expected return, for exampleto invest in shares in existing companies and in projects welldefined and properly managed producing 20% per annum.Same applications as banks, they will take shares andexpect to take profit from the share value increase, therevenues, and the capital appreciation of the project.

Private Equity&

Venture Capital FundsThese funds invest in companies by taking equity (shares), orin projects held by companies. They expect to take a profitwith an agreed clear exit policy (selling to an end client) within3-5 years, selling to an identified purchaser or to go AIM/IPOon the London Stock Exchange.

Note on construction finance (also comes under projectfinance) There are different investors interested in theproperty and construction market in most countries showingan annual let of over 10%; most are looking at eitherpurchasing an existing Class A building fully let on longleases to prime tenants, or funding a Class A constructionproject to purchase at term when fully let.

Industry partners & Joint Venture

European industry principalsEuropean construction companiesEuropean and British end users such as supermarket groups, hotel groups etc.

These companies are looking for joint venture opportunities, or to buy specified commercial centers or hotels, and sometimes to manage hotels only.

Preparation of yourinvestment requirementsWe check your company profile and its project with the investment requirement. We will establish together if the requirement is:

Debt Finance or Project Finance (banks) currently difficultInvestment FundsPrivate EquityVenture CapitalJoint Venture with a suitable partner

You will need:Project owner profile & full project descriptionFinancial requirements with drawdown requirementsPayback cash flow projectionsGuarantees, security, own fundsEquity proposition and relevant exit policy for the investor.

Western viewpoints –main points

• Analytical expectations rather than only a global vision• Limiting risks on forecast profits more important than maximizing

possible earnings• Access to raw materials & how you access markets• Guarantees & security of exit at term• Emphasizing management & control over investment

implementation

Western viewpointManagement versus Investment approach

• Importance attached to initial precise studies of: • planning• budgets • markets and competition, market position• alternative scenarios

• Preference for careful forecasting• Implementation of an accurate management of the investment

phase• Energetic project driver team, age and experience

Western viewpoint Analytic versus Global vision

• Presentation, advice & support of Western specialists highly appreciated (Advent UK)

• Strong insistence on details• Business model clarity• Legal & fiscal structure of project owner, shareholding, balance

sheets, assets all very important

Western viewpointRisk versus Gain

• More important to realize what has been announced in the plan than to anticipate to gain fortunes

• Importance of decision making process within project team with financial team

• To be prepared to invest in studies (feasibility & marketing studies etc.) to assure accurate projections

• SWOT analysis

Western viewpointGuarantees by project owner

Valuations on assets/security – land, plant, buildings, cash, vehicles, other assetsGovernment guarantees?Valuation on shares of project companyValue of sales contracts and terms

Western viewpointSpecialized versus General

• Funding institutions are now very much specialized by teams covering:

• Financial requirements (debt finance, project finance, construction, JV, M & A)

• Market sector activity (industry sector – energy, construction, agriculture, plastics etc.)

• Geographical areas (Russia/CIS)• Decisions by investors are always collective, and made through a

decision making procedure, legal, fiscal, managements etc.• Decisions will be through written files leading to contractual

agreements• The project owner has to become a financial expert!

Western finance todayFinance market

• Land &construction• Russian equipment• Country 1 equipment• Country 2 equipment• Utility vehicle fleet• Intangible property• IT• Float• Studies• …

One loan

Western Finance possibilities• Land Buildings & laying out• Russian equipment• Country 1 equipment• Country 2 equipment• Utility fleet/machinery• Intangible property• IT• Float (stocks, suppliers, ...)• Studies• Overheads

• Total Funding need

100% perhaps with rental contractNo credit% Guaranteed purchaser credit% Guaranteed purchaser creditLeasing?% loan% loanFactoring?No creditCash management products

Gap to be financed by :Project ownerInvestors

Western Financial Control of ownership

• Total Funding need

Project Loans/Rents

Loan & owner guarantee

Owner cash

Investors Cash

Project cash flow

Owner cash

Total or partial buy-back by project owner through his personal future increased ability to find new funding

Several ways to finance the funding needs through external finance people

MOST IMPORTANT :Ways to keep control of the project by the project owner

A global funding need that the project owner cannot provide

What is expected from project team

Dedication to the projectDedication of time and project team competenceLots of work!

Mastering finance culture

Active project elaboration teamProximity to project ownerAbility to react quickly and preciselyMastering of PowerPoint presentation and Excel spreadshest

Re-activitve responses and regular synchronization

Transcultural willingness

Advent UK activitiesConclusion

Financial NetworkInternational BanksFinancial InstitutionsInvestment FundsPrivate Equity CapitalVenture CapitalistsInternational lawyersInternational AccountancyAudit firmsTax specialist

The Project presentation

Advice, support & search for your financial partners &

financial coordination

ContactsADVENT UK LTD

Suite 8, 28 Old Brompton Road, LONDON SW7 3SSTel +44207 801 3080 Fax +44207 691 7969

Bureau d'information France:15 Rue Clément Bayard, 92300 Levallois, PARIS

Tel +331 47 48 91 97 Fax +331 47 48 02 22

Representation office Russia:State Research Institute Test

56B Ligovsky Prospect, 191040 ST PETERSBURGTel +7812 712 0176

www.advent-uk.comBuilding Excellence in Business