IPO

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Equity and debt financing in a volatile
environment
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• About FIMA Group

• Experience
• Knowledge
• Management
• Assets

• Strong financial conglomerate with the investment
  potential in excess of EUR 400 million

• Brokerage
• Portfolio management
• Croatia, Serbia, Bosnia and Herzegovina, Ukraine

• Investment funds, closed end, open end
• Equity, bond
• Offices in Croatia, Serbia

• Project financing
• MA, privatization, IPO, PPP
• Offices in Varadin, Zagreb, Beograd, Sarajevo,
  Pritina and Skopje

• FUNDS

• Real estate development and consultancy

• Focused on municipality and private banking
• Croatia, Bosnia and Herzegovina, Serbia

• Domestic and international factoring
• Compensations
• Trading debt and receivables
• Croatia, Serbia, Bosnia Herzegovina, Ukraine

• Quality intermediation in insurance transactions
• Needs-and-risks analysis

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• About division FIMA FAS services

Capital markets

• Restructuring

• Financial restructuring
• Managing liquidity
• Debt restructuring
• Operational restructuring
• Operational review
• Business process improvement
• Reorganizations

• Structuring bonds issues
• Capital market transactions (IPO, SEO)
• Securitization

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Introduction

• The destructive power of the global financial
  credit crunch proof to be  stronger  than a war
  itself. Companies which survived throughout WWW
  II, Oil and Currency crises were wipe out in a
  single year because of the inability to access
  finance. Lets recall that all of them had access
  to sophisticated markets of financing through
  Equity and Debt,  not a case for Macedonian
  companies.

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Introduction

The purpose of this seminar is to tackle
Macedonian companies handicap relaying on the
banking sector for a financing. Shutting bank
pipeline in Macedonia opens the question for
filling future needs for capital.
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Models of Finance available for Companies

• As a Manager of Macedonian Company where do you
  often seek finances for your company?
• Models of Finance available for Companies
• Debt (Mainly through the banks)
• -Bank Loan/Credit
• -Bonds, bills, or notes to individual and/or
  institutional investors
• Equity (New shares)
• Issue of Common Stock (IPO)
• Issue of Preferred Shares

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Models of Finance available for Companies

• Debt MK (Mainly through the banks)
• Advantages
• Debt is considered cheaper alternative to equity
  finance?
• The benefit of debt financing is that it is
  finite zero sum game (fixed borrowing)
• MK Banks finances base is floating rate
• Disadvantages
• Claim on a Hard backed assets - Collateral
• Claim on the cash flow regardless of the company
  condition
• Interest rate risk to repay the principal
  interest
• Interest rate risk money supply liquidity
  

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Models of Finance available for Companies

• Interest rate risk money supply liquidity
• LIBOR 3m spread

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Models of Finance available for Companies

• FED Central bank intervention during credit
  crunch crises

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Models of Finance available for Companies

• The nation endured a deep recession throughout
  1982.
• Business bankruptcies rose 50 percent over the
  previous year.

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Equity financing
Optimal Capital Structure

Debt
Equity
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Equity financing
Equity -Issue of Common Stock
IPO -Issue of Preferred Share
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Advantages of IPO-a
Leveraging financial power
Investor diversification
Lowering cost of financing
Advantages
Daily Market Cap Estimation
Less dependable on the banks
Broad/concentrated shareholder structure
Liquidity (shares sale)
Marketing promotion
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Barriers to IPO
Level of control demanded from present
shareholders
Appropriate liquidity
Company size/ founding capital
Deciding on optimal size of the IPO
Cycle in financial markets
Conservative Investor
Accepting single investor
Wanted capital structure
Maximum value achieved through supply and demand
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IPO Process
Beginning phase
Due diligence
Developing financial model
Draft prospectus
Submitting Prospectus Regulator
Organizational meetings
12 weeks
Review phase from Regulatory agencies
Roadshow preparation
Review period from the regulator
12-18 weeks
Marketing phase
Sale prezentation
Roadshow
Price fixing
Closing
Publishing preliminari prospectus
8 weeks
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Due diligence


Preparation Phase

• Why due diligence?

• Introducing company to the agent
• Abolishing risk of IPO failure
• Preparing management for investor question
• Unbiased evaluation of the company

Synchronization of the company With the best
practices
Answering investor question
Best price in the IPO process
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IPO in a real world

• IPO share of the biggest real-estate fund
  Croatia FIMA Proprius
• Publishing Agent FIMA Vrijednosnice
• Large scale marketing activities included
• Daily and weekly print media
• Journalist press conference
• roadshow in 10 countries(SAD, CAN, UK, SWE, EST,
  LTU, UKR, CZ, HUN, SRB i SLO)
• Capital accumulated HRK 200 milions, twice the
  planned amount of HRK 100 milijuna
• After IPO total of 485 shareholders ? diversified
  shareholder structure

• Proces of IPO in INA was widely accepted around
  44.000 citizens signed for shares in INA-e
• Stimulating financial markets in Croatia?
  increasing the number of active participants in
  the capital markets
• Record trading volumes on Zagreb stock exchange
  CROBEX

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Credentials

• Financial Advisors in MBO (management buy-out)
• 2007

• Financial Advisors in Company restructuring
• 2007

• Financial Advisor for Government on refinancing
  of Istrian motorway
• 2007

• Financial Advisor for Government on refinancing
  of Zagreb - Macelj motorway
• 2008

• Business process documentation in accordance with
  the regulatory requirements (HANFA) /basis for
  ISO certification
• 2007

• Construction
• Financial Analysis, Company Valuation and
  Strategic Advisory for Management
• Pending

• Financial Analysis, Company Valuation and
  Strategic Advisory for Management
• In progress

• Company Valuation and survey for Strategic
  partner
• In progress

• Development of Value-at-Risk (VaR) market risk
  measurement system
• 2007

• Metal industry
• Financial Advisor in privatization of Radijatora
  a.d. (first cross-border privatization)
• 2007

• Business process improvement activities
• In progress

• Financial Advisor in the sale of the Company
• In progress

• Finvest Drvar d.d.
• Company Valuation and survey for Strategic
  partner
• In progress

• Financial advisory / preparation for the
  development waste management facility (PPP model)
• In progress

• City of Ivanec utility company / business
  process improvement advisory
• Pending

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Credentials

• Members of FIMA FAS team participated as
  financial advisors in acquisition of local
  distributor Kiosk promet
• 2005

• Legal Advisor for restructuring and valuation
• 2004

• Members of FIMA FAS team participated as
  Financial Advisors in Valuation of Energopetrol,
  Sarajevo
• 2005

• Members of FIMA FAS team participated as
  Financial Advisors in acquisition of Bilokalnik
  d.d.
• 2004

• Financial Advisor in Listing of Company shares on
  Varadin Stock Exchange
• 2004

• PAN TRGOPROMET
• Financial Advisor in Listing of Company shares on
  Varadin Stock Exchange
• 2004

• Financial Advisor in acquisition of Brodsko
  Posavska bank (now VABA bank)
• 2004

• Financial Advisor in Listing of Company shares on
  Varadin Stock Exchange
• 2004

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Contacts
FIMA FAS Ltd. Anina 2 42 000 Varadin Zagreb
office Ulica grada Vukovara 271/9 10 000 Zagreb
FIMA FAS Ltd. Pirinska 48/8 1000 Skopje Tel
389 2 3 223142 Fax [phone]
Mire Desoski CEO FIMA FAS Macedonia Tel 389 2
3223142 Fax [phone] E-mail
desoski_at_fima.com.mk
Denis Smolar President of the Board Tel 385 1
6003 305 Fax [phone] E-mail
dsmolar_at_fima.com
Ivica Jovanovski Deputy CEO FIMA FAS
Macedonia Tel [phone] Fax 389 2 3
215670 E-mail jovanovski_at_fima.com.mk