Presentation for ISP

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Presentation for ISP

• June 3rd, 2002

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The CET Story

• Founded in 1989 by leading professionals from the
  investment banking and strategy consulting worlds
• Clients benefit from the application of the
  standards of global institutions and the fact
  that the firm is distinctly Central and Eastern
  European in culture
• The firm places equal emphasis on consulting and
  investment banking skills to provide best support
  for emerging market ventures
• 80 professional staff and 6 principal offices

MOSCOW
LONDON
WARSAW
PRAGUE
BUDAPEST
BUCHAREST
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CETs Senior IT-MA ProfessionalsCETs
IT/Telecommunications team is lead by
professionals with deep experience and
understanding of the industry as well as a
developed network of relationships throughout the
Region
15 years of telecommunications consulting,
including a period as Head of Booz Allens
European Telecoms practice, with 12 years in CEE.
Previously member of the faculty at Harvard and
MIT and with IBM and BT.
Charles Jonscher
Jan Dauman
25 years of IT/Telecoms business and management
consulting for leading multinational companies
(IBM, Xerox, Cisco, GTE, GE, etc.) with 11 years
in Russia.
Tom Lampl
20 years of corporate finance and private equity
experience in London, Switzerland and New York,
with JP Morgan, Rothschilds, and Wartburgs
Jan Lembas
12 years of telecoms strategy, MA, and
management consulting for leading multinational
companies in the region
Phillip Lee
10 years of telecoms operational and finance
experience with US West and GTS in CEE.
Nick Robb
20 years of telecoms operational and consulting
experience (BT, Cable Wireless, ATT, Nera),
including in Russia.
Antoni Rakowski
12 years of consulting experience in Poland,
including leading telecom companies (Vodafone,
GTE, Comcast). Advised Western Clients in more
than 20 equity transactions in the region.
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CETs Services
CET is Central and Eastern Europes leading
strategic and financial advisor, using its unique
combination of offerings to complementary effect
25 of the worlds 100 largest corporations have
chosen CET as their advisor for business
development and acquisition strategy in the
Region. Fortune Global 100
Doing the deal From IT/telecommunications to
heavy industry to consumer goods, over 90 of CET
deals close.
Mergers acquisitions
Strategic consulting

Capital raising and private equity
AIG-CET Capital Management raised and manages the
320 million New Europe Fund, the largest private
equity fund to date in the Region.
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CETs Blue Chip Multinational Clients...
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CETs Blue Chip Telecommunications and Technology
Clients...

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• CET
• STRATEGIC CONSULTING

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CETs Unique Capabilities
CET supports its clients activities in the
Region through its unique combination of strategy
consulting, MA and private equity capabilities
START
FINISH
Scope of initial engagement
Ongoing relationship
ONGONG
Consulting
Integration Implementation
Strategic Planning
Strategic Review
Advisory Services
Mergers Acquisitions
Transaction Management
Advisory Services
Target Selection
Private Equity
Transaction Management
Market Opportunity
Advisory Services
Teaser Preparation
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CET Consulting

We have well developed methodologies in business
development consulting
Integration Implementation
Advisory Services
Strategic Review
Strategic Planning

• Provide ongoing strategic advice to merged entity
  in order to maximise shareholder value and
  provide exit for portfolio investors

• Match data from clients current businesses,
  regional strategy and acquisition target
  companies
• Hypothesise suitable market strategy for merged
  entity
• Test hypothesise suitable market strategy for
  combined entity
• Market test hypothesis
• Design integration strategy to meat strategic
  objectives

• Assist management in achieving strategic
  objectives
• Provide support on organisational development and
  personnel sourcing

• Analyse clients current Regional business plan
• Analyse regional telecommunications market
• Hypothesise suitable regional strategy
• Interview clients executives and regional
  management
• Generate acquisition selection model
• Validate regional strategy and acquisition model

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Strategic Consulting For The Worlds Leaders
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• CET
• MERGERS ACQUISITIONS

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Mergers and Acquisitions
CET M A
Over the past 12 years, CET has been involved in
MA / Privatisation / Joint Venture projects
throughout Central and Eastern Europe, including
Russia / CIS, representing Western and local
clients on both the buy-side and sell-side of
transactions.   These projects have required a
broad range of CET professional skills and
experience, including company/business
valuations, information memoranda,
pre-privatisation analysis (due diligence),
privatisation strategy, tender documents,
business plans, screening of potential investors,
negotiations with potential investors/buyers,
trade unions and decision-making State
authorities, transaction documents, closing and
monitoring.  
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CET M A
Significant buy and sell side experience has led
to a deep understanding of how to execute a
successful transaction process
Target Selection
Transaction Management

• Approach and initiate discussions with targets
• Support in negotiation of term sheet(s)
• Aid in selection of legal and accounting advisors
• Management of legal and financial due diligence
• Advise and implement negotiation strategy
• Completion of final documentation

• Generate segmented list of telecommunications
  companies in region
• Apply acquisition selection model to generate
  short list
• Obtain detailed financials and carry out market
  interviews to test target business plan
• Carry out target valuation exercise
• Present target list with valuation and potential
  transaction structure

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Case Study Full Advisory Transactional Support
CLIENT ORBIS S.A. Polands largest hotel and
tourist services company. PROJECT
DESCRIPTION Strategic Consultancy Business
Transformation Privatisation Private Equity
Fund Raising Public Listing 280
million Strategic Investor Selection CET
RESPONSIBILITY Oversee the reorganisation of one
of the largest Polish firms, prepare it
for privatisation, raise capital, find a
strategic investor and list the company -
Restructuring/Reorganisation - Market and
competitive analysis - Company
valuation - Privatisation strategy
development - Strategic investor screening and
selection - Equity placement with financial
investors - Warsaw Stock Exchange listing
support
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Czech Republic Experience - Highlights

• Buy side
•  
• CPC (Czech) - acquired majority in a local food
  producer
• Delta Progress (Czech) - CPC (UK) acquired assets
  of this mayonnaise producer
• Prazske Pivovary (Czech) 54 equity of this
  leading Czech brewer acquired by Bass Brewers
  (UK)
• Vratislavice Pivovary (Czech) 78 equity of
  this Czech brewer acquired by Bass Brewers (UK)
• Ostravar Pivovary (Czech) 51 equity of this
  Czech brewer acquired by Bass Brewers (UK)
• Radegast Pivovary (Czech) 30 equity of this
  Czech brewer acquired by Bass Brewers (UK)
• BPB Rigips (UK) US30 mil. greenfield
  investment in Czech Republic based on long-term
  gypsum supply agreement with CEZ/Elektrarna
  Melnik
• CGNU (UK) acquisition of 64 stake in the Czech
  pension fund VVPF
• Sell side
• Czech Telecommunications Office (Czech) sell of
  UMTS licences, CET recently closed the US200
  million sale of two Czech UMTS licenses
• Czech producer of automotive parts (Czech) sell
  of a significant majority stake in the company
• Prefabeton (Slovak) for the construction
  material producer CET prepared market analysis
  and company valuation in respect of the sell of
  the company
• Lovochemie (Czech) CET provided valuation of
  the energy division and suggested the selling
  strategy

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Poland Experience - Highlights

• Buy side
•  
• Toruñ Pacific (Poland) - placement of new equity
  for Bank Handlowy, followed by acquisition by
  Nestle (Switzerland) and General Mills
• (USA)
• FLT Prema (Poland) Taper Bearing Division of
  Milmet SA Sosnowiec acquired by Timken (USA) from
  the II National Investment Fund
• for USD30 million
• Mildes (Poland) dairy manufacturer acquired by
  Danone (France)
• Polifarb Pilawa (Poland) paint producer
  acquired by ICI (UK)
• Gopak (Poland) - packaging manufacturer acquired
  by Carnaud Metalbox (France)
• Pudliszki (Poland) processed food manufacturer
  acquired by H.J. Heinz (USA)
• Elektromis (Poland) - retail chain acquired by
  Booker Plc (UK) and Jeronimo Martins (Portugal)
• Fotoworld (Poland) - chain of photo-labs acquired
  by Kodak (USA)
• Towarzystwo Ubezpieczen Zyciowych i Emerytalnych
  STU Zycie S.A. (Poland) life and pension
  insurance company - 51 of the
• companys equity acquired by CIGNA
  International (USA)
• Sell side
•  
• TEC EKO S.A. (Poland) telecommunications
  equipment manufacturer Ministry of State
  Treasury sold 100 of equity

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Romania Experience - Highlights

• Buy side
•  
• Miorita (Romania) - dairy plant acquired by
  Danone (France)
• Rulmenti Grei (Romania) 70 equity acquired by
  Timken (USA) for USD60 million
• Bere Miercurea Ciuc (Romania) - acquired by East
  Europe Food Fund (UK)
• Haber (Romania) -acquired by Brewery Holding Ltd.
  (Cyprus) from Commercial Bordoy (Spain)
• Grivita Brewery (Romania) -acquired by Brewery
  Holding Ltd. (Cyprus) from Commercial Bordoy
  (Spain)
• Capital Invest (Romania) - data transmission
  licence and JV formation by Global TeleSystems
  (USA)
• Sell side
•  
• Comelf (Romania) manufacturer of mechanical
  equipment for environmental industry, acquired by
  Uzinsider from State

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Russia Experience - Highlights

• Buy side
•  
• Armavir Tobacco (Russia) acquired by RJ
  Reynolds Tobacco International S.A. (USA)
• AO Lyubyatovo (Russia) confectionery factory
  11 equity stake acquired by Nabisco
  International (USA)
• A/O Yelets Tobacco (Russia) - cigarettes
  manufacturer acquired by RJ Reynolds Tobacco
  International S.A. (USA)
• Novo Moskovsky Bytkhim (Russia) - chemicals
  manufacturer acquired by Procter Gamble (USA)
• NNIPI Kvartz (Russia) assets acquired by
  Preparados Alimientos S.A. (Spain)
• Volgograd Oxygen Factory (Russia) - majority
  (80) stake acquired by BOC Gases (UK)
• Lisova Pisnya (Ukraine) - retail network
  established by Seagram Holland
• Slavich (Russia) - chain of photo labs acquired
  by Kodak (USA)
• Brownfield (Ukraine) - Preparados Alimenticios
  (Spain) acquired a brown-field in Ukraine
• Moscow land-site for auto / service station
  acquired by Inchcape plc (UK)
• Biomed (Russia) JV with SmithKline Beecham for
  the production and distribution of vaccines
  formed
• JV (Russia) created for green-field bottling
  plant for Coca-Cola in Yekaterinburg
• Sell side
•  
• Nizhpharm (Russia) pharmaceuticals manufacturer
  25 equity stake acquired by EBRD

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Mergers and Acquisitions
CET has closed over 80 Transactions in Central
and Eastern Europe
Vodafone Air Touch
Timken International Co.
U.S. West
Amoco Fabrics Europe
and
Hungarian Telephone Co.
and other members of the consortium
has acquired 100 interest in
Acquired a production site from
created a joint venture
Polkomtel S.A.
Prema Milmet Sosnowiec Poland
Gyor Industrial Park Ltd.
Westel 900
for its newly established operation
have acquired through Polkomtel a
which bid for and obtained a licence to
licence to operate a national GSM cellular
operate a cellular telephone network in
telecommunication network in Poland
Hungary
We acted for Air Touch in the formation of the
We acted for the acquirer in the negotiation and
We acted for US West and Westel 900 in the
We acted for the acquirer in the negotiation and
consortium and the acquisition of the licence
completion of this transaction
negotiation and completion of this transaction
completion of this transaction
Miercurea-Ciuc
Booker plc
CarnaudMetalBox S.A.
Bass PLC
and
has acquired 34 of the equity of
through its fully-owned subsidiary
Jeronimo Martins Filho S.A.
Placement of newly issued equity with
Prazske Pivovary a.s.
CMB Packaging
Prague Breweries Ltd.
Hungary
East European Food Fund
acquired 100 of the assets of
has acquired the packaging interests of
has acquired 78 of the equity of
Elektromis S.A.
Nagykorosi Konzervgyar
Pivovary Vratislavice a.s.
Rt.
to form
has acquired 51 of the equity of
and
Eurocash JMB Polska Sp
Pivovary Ostravar a.s.
Szigetvari Konzervgyar
z.o.o.
We acted as strategic advisor in the negotiation
and completion of this transaction
We acted for the acquirers in the negotiation and
We acted for the acquirer in the negotiation and
We acted for the acquirer in the negotiation and
completion of this transaction
completion of this transaction
completion of this transaction
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Mergers and Acquisitions - Continued
HJ Heinz
South African Breweries (SAB)
Seagram
CGNU
Acquired 65 interest in
acquired
has established
has established
Kaluga Brewery Russia
Lisova Pisnya
Pudliszki
WPF Pension Funds
Ukraine
Czech Republic
Poland
We acted for SAB in the negotiation and
completion for this transaction
We acted for the acquirer in the negotiation and
We acted for Seagram in the negotiation and
completion of this transaction
We acted for the acquirer in the negotiation and
completion of this transaction
completion of this transaction
CPC
Coca Cola
Bristol Myers Squibb
Nestle General Mills
acquired the interests of
has established a joint venture for erection of
a green field-bottling plant in
acquired the interests of
acquired 100 interest in
Genericon Pharma GmbH
Torun Pacific Poland

Szegedi Paprika Feldolgozo in CPC
Magyarorszag Hungary
Russia
in
Pharmavit
Hungary
We acted for the sellers in the negotiation and
completion for this transaction
We acted for the acquirer in the negotiation
and completion of this transaction
We acted for the acquirer in the negotiation and
completion of this transaction
We acted for the acquirer in this transaction
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• CET
• CAPITAL RAISING

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CET Capital Raising
Capital Raising and Funds

• CETs strategic consultancy and MA experience
  enabled it to enter into a number of private
  equity transactions on its own account and later
  backed by Charter House of the UK.
• Purchased a yogurt factory and, after
  restructuring, sold it to Danone.
• Invested in a dairy concern and later executed at
  solid profits to Bongain.
• Together with Framlington, CET co-managed the
  EBRD financed Slovakian Post-Privatization Fund
  employing 50 million.
• CET was the advisor to Jupiter Asset Management
  in the management of the 90 million East
  European Food Fund.
• CET co-managed 100 million in assets in one of
  Poland National Investment Funds. The NIF was
  later sold to Everest Capital and is considered
  as one of the most successful NIFs in Poland.
• Leveraging CETs now significant and successful
  experience in private equity and fund management,
  CET partnered with AIG Capital Management to
  raise and manage the New Europe Fund, the
  regions largest private equity fund.
• Raised 320 million based on CETs regional
  experience and AIGs global expertise.
• Successively placed the two largest private
  equity transactions in Central Europe.
• Led the transaction to invest 80 million in
  Mobil Rom of Romania.
• Organized and led the consortium to invest 180
  million in Globtel of Slovakia.
• CET has managed nearly 500 million in private
  equity.

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CET Capital Raising
CETs experience with Private equity leaves it
uniquely placed to exploit this opportunity
Transaction Management
Market Opportunity
Teaser Preparation

• Generate list of suitable funds from in-house
  database
• Approach funds with teaser and initiate
  discussions
• Manage relationships through to letter of intent

• Review information from target selection and
  strategic planning work streams
• Prepare short document to attract potential
  Private Equity Investment to an opportunity led
  by a client

• Support in negotiation of term sheet(s)
• Aid in selection of legal and accounting advisors
• Management of legal and financial due diligence
• Advise and implement negotiation strategy
• Completion of final documentation

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CET Capital Raising
CETs private equity experience leaves it well
placed to explore this opportunity
Preparatory phase X Months
Marketing phase X Months
Transaction phase X Months

• Due diligence
• Validation of business plan
• Development of financial forecast
• Valuation of enterprise based on both assets and
  earning potential
• Information memorandum process
• Aid in selection of legal advisors

• Identification of prospective investors and
  financial sources
• Execution of nondisclosure agreements
• Distribution of information memorandum and follow
  up
• Evaluation of initial offers and expressions of
  interest
• Selection of short list candidates
• Due diligence of investors

• Negotiation of term sheet(s)
• Management of legal and financial due diligence
• Full negotiations strategy and implementation
• Completion of final documentation

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Capital Raising Funds
Record Making Transactions
ORBIS S.A. Poland Initial Public Offering
Subsequent Equity Placements 280,000,000 CET L
ead Advisor
STALEXPORT S.A. Initial Public Offering Polish
Zloty 1,905,000,000,000 CET Lead Advisor
Largest equity offering of the year on the Polish
Stock Exchange
Record-setting private placement in the sector
MOBIL ROM National GSM Operator Private
placement 80,000,000 AIG-CET Capital
Managers Syndicate Leader
AIG New Europe Fund Capital raised 320,000,000
AIG-CET Capital Managers Fund Manager
Largest private equity fund raised in Central and
Eastern Europe
Largest private equity fund placed transaction
closed in Central and Eastern Europe
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Fund Management
CETs fund management expertise uniquely places
it to leverage both its relationships in the
Private Equity community and its insight into
their requirements

• Additional Experience
• Co-managed EBRD financed US50 million Slovakian
  Post-Privatisation Fund with Framlington
• Advisor to Jupiter Asset Management for US90
  million East European Food Fund
• Co-managed US100 million in assets in one
  Polands National Investment Funds

AIG New Europe Fund Capital raised 320,000,000
AIG-CET Capital Managers Fund Manager
Largest private equity fund raised in Central and
Eastern Europe
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Recent Capital Raising
CET recently closed the US200 million sale of
two Czech UMTS licenses, the first such sale in
Central and Eastern Europe

• Fund raising on behalf of Czech Government
• Financial Times reported in November that the
  auction process had failed
• but CET closed successfully, above the
  Governments minimum price, in difficult market
  conditions

UMTS AUCTION Czech Republic 200,000,000 Capita
l raised CET Lead Advisor
First auction of UMTS Telecom Licences in Central
and Eastern Europe
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Capital Market Sentiments
Private Equity funds have money to spend and are
showing interest in IT/telecommunications in the
Region

• Private equity firms. With cash they have been
  unable to spend while markets have been unstable,
  are expected to show an interest in government
  owned Telecoms companies
• Czech privatisation agency had been contacted by
  25 interested parties for the sale of Cesky
  Telecom. Those expected to make offers include
  Apax Partners, CVC Capital Partners, Doughty
  Hanson, Providence Capital, and Spectrum Equity
  Partners

• CET recently raised mezzanine financing from a
  Private Equity Fund for a broadband service
  provider to small and medium enterprises in a
  Central European country
• CET has also recently raised Private Equity
  funding for a CATV operator in SEE