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

                                 • Experience
                                 • Knowledge
 Strong financial               • Management
  conglomerate with the          • Assets
  investment potential in
  excess of EUR 400              • Brokerage
                                 • Portfolio management
  million
                                 • Croatia, Serbia, Bosnia and Herzegovina, Ukraine


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

                                 • Project financing
                                 • M&A, privatization, IPO, PPP
                                 • Offices in Varaždin, Zagreb, Beograd, Sarajevo, Priština
                                   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



                                                                                              2
About division FIMA FAS                       services


     Capital markets                               M&A Advisory                  Restructuring

                                                  Company mergers and       Financial restructuring:
    Structuring bonds issues
                                                   acquisitions                  Managing liquidity
                                                  Spin off/ disinvestment       Debt restructuring
    Capital market transactions (IPO,
                                                  MBO, LBO, ESOP
     SEO)                                         Privatizations            Operational restructuring:
    Securitization                                                              Operational review
                                                                                 Business process improvement
                                                                                 Reorganizations




     Research                                                                    Project finance adv.

     Valuation of stocks and companies                                         Assistance to local governments on
     Financial analysis of industries                                           public-private-partnership projects
     Financial analysis of credit potential                                    Assistance with fund raising
                                                                                Financial modeling; assistance with
                                                                                 financial structuring
     Liaison with Asset management




                                                                                                                       3
             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.




                                                                                                4
    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.




                                                                              5
       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




                                                                                        6
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




                                                                                         7
Models of Finance available for Companies



  Interest rate risk= money supply + liquidity

  LIBOR 3m spread




                                                 8
Models of Finance available for Companies




  FED Central bank intervention during credit crunch crises




                                                              9
Models of Finance available for Companies




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



                                                         10
Equity financing

          Optimal Capital Structure




                                      Debt




                    Equity

                                             11
Equity financing




           Equity



  -Issue of Common Stock IPO



  -Issue of Preferred Share




                               12
Advantages of IPO-a

                            Leveraging
                             financial
                               power
           Investor                      Lowering cost
        diversification                   of financing




Daily Market                                        Less
     Cap                  Advantages           dependable on
 Estimation                                      the banks




    Broad/concent
        rated
                                           Liquidity
     shareholder
                                         (shares sale)
      structure              Marketing
                             promotion




                                                               13
Barriers to IPO
                           Level of
                           control
                          demanded
                        from present
         Appropriate    shareholders     Company size/
          liquidity                        founding
                                            capital




 Cycle in
                       Deciding on
 financial             optimal size             Conservative
 markets                                          Investor
                        of the IPO




      Accepting
                                         Wanted capital
   single investor         Maximum
                                           structure
                        value achieved
                            through
                          supply and
                           demand


                                                               14
   IPO Process

                                                     Developing                Submitting
                    Organizational       Due                        Draft
                                                      financial                 Prospectus
                      meetings         diligence                  prospectus
 Beginning phase                                      model                     Regulator



                                                     12 weeks




Review phase from     Roadshow           Review period
                     preparation       from the regulator
   Regulatory
    agencies
                                   12-18 weeks



                     Publishing
                                         Sale                       Price
                     preliminari                      Roadshow                    Closing
                                      prezentation                  fixing
 Marketing phase     prospectus


                                                     8 weeks



                                                                                             15
                        Due
                       diligence




              Why due diligence?
Preparation
  Phase                             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



                                                                                  16
                  IPO in a real world


            Kretanje cijena i promet dionicama INE od IPO do danas
 HRK '000                                                     HRK
  40.000                                                       4.000
                                                                       • IPO share of the biggest real-estate fund
  35.000                                                       3.500
                                                                         Croatia FIMA Proprius
  30.000                                                       3.000

  25.000                                                       2.500
                                                                       • Publishing Agent – FIMA Vrijednosnice
  20.000                                                       2.000   • Large scale marketing activities included:
  15.000                                                       1.500
                                                                          Daily and weekly print media
  10.000                                                       1.000

   5.000                                                       500
                                                                          Journalist press conference
      0                                                        0          roadshow in 10 countries(SAD, CAN, UK,
                                                                           SWE, EST, LTU, UKR, CZ, HUN, SRB i SLO)
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                                                                       • Capital accumulated HRK 200 milions, twice
                         Promet   Zadnja cijena
                                                                         the planned amount of HRK 100 milijuna
• Proces of IPO in INA was widely accepted around 44.000
  citizens signed for shares in INA-e                                  • After IPO total of 485 shareholders 
• Stimulating financial markets in Croatia increasing the               diversified shareholder structure
  number of active participants in the capital markets
• Record trading volumes on Zagreb stock exchange
  CROBEX




                                                                                                                      17
                  Credentials



    Financial Advisor for            Financial Advisor for                                                                               Business process documentation
                                                                         Financial Advisors
                                                                                           in MBO
  Government on refinancing of      Government on refinancing of                                                                           in accordance with the regulatory
                                                                            (management buy-out)        Financial Advisors in Company
   Zagreb - Macelj motorway              Istrian motorway                                                                                  requirements (HANFA) /basis for
                                                                                                                 restructuring
                                                                                                                                                   ISO certification


             2008                              2007                                                                                                   2007
                                                                                    2007                           2007



                                                                                                                Construction



                                           Metal industry
Development   of Value-at-Risk
 (VaR) market risk measurement                                          Company Valuation and survey    Financial Analysis, Company       Financial Analysis, Company
                                         Financial Advisor in
            system                  privatization of Radijatora a.d.         for Strategic partner      Valuation and Strategic Advisory   Valuation and Strategic Advisory
                                   (first cross-border privatization)                                           for Management                     for Management


             2007                              2007                            In   progress                    Pending                           In   progress



                                                                             Finvest   Drvar d.d.



                                                                                                                                           City of Ivanec – utility company
                                   Business process improvement                                        Financial Advisorin the sale of    / business process improvement
Financial advisory /preparation                                        Company Valuation and survey
                                               activities                                                        the Company                            advisory
  for the development waste                                                  for Strategic partner
management facility (PPP model)


          In   progress                                                                                                                               Pending
                                                                                In    progress
                                             In   progress                                                       In   progress


                                                                                                                                                                               18
                     Credentials

                                                                                                   Bjelovarsko-
                                                                                                   bilogorska
                                                                                                   county

                                                                                                                                Members of FIMA FAS team
                                            Members of   the FIMA FAS                                                                                                      Members of FIMA FAS team
  Members of   the FIMA FAS                                                         Legaland Financial Advisor for           participated in merger with Senso
                                           team were part of Banca Intesa                                                                                                  participated as financial advisors
 team were part of Banca Intesa                                                        Regional operating plan and               Mikro, regional wholesaler of
                                              team in acquisition of LT                                                                                                    in acquisition of local distributor
team in acquisition of UPI bank,                                                           Development plan                           computer equipment
                                            Gospodarske bank, Sarajevo                                                                                                               Kiosk promet
           Sarajevo
                                                                                                                                            2005
                                                        2006                                                                                                                            2005
             2006                                                                               2006




                                           Financial Advisor
                                                            in Listing of
 Members of    FIMA FAS team               Company shares on Varaždin                                                                 Advisor in Listing of
                                                                                                                               Financial
participated as Financial Advisors              Stock Exchange                       Members of  FIMA FAS team                Company shares on Varaždin                  Legal   Advisor for restructuring
  in Valuation of Energopetrol,                                                   participated as Financial Advisors               Stock Exchange                                    and valuation
             Sarajevo                                                              in acquisition of Bilokalnik d.d.


             2005                                                                               2004                                      2004
                                                        2005                                                                                                                            2004




                                                                                                                PAN   TRGOPROMET
                                                                              


                                                                Financial Advisor
                                                                                 in Listing of            Financial Advisorin Listing of             Financial Advisor
                                                                                                                                                                       in Listing of
                    Financial Advisor in acquisition            Company shares on Varaždin                 Company shares on Varaždin                 Company shares on Varaždin
                     of Brodsko Posavska bank (now                   Stock Exchange                             Stock Exchange                             Stock Exchange
                              VABA bank)


                                   2004                                    2004                                      2004                                       2003




                                                                                                                                                                                                                 19
Contacts

 FIMA FAS Ltd.
 Anina 2                          FIMA FAS Ltd.
 42 000 Varaždin                        Pirinska 48/8
                                        1000 Skopje
 Zagreb office                      Tel: +389 2 3 223142
 Ulica grada Vukovara 271/9         Fax: +389 2 3 215670
 10 000 Zagreb

                              Mire Desoski
 Denis Smolar                 CEO FIMA FAS Macedonia
 President of the Board       Tel: +389 2 3223142
 Tel: +385 1 6003 305         Fax: +389 2 3215670
 Fax: +385 1 6003 303         E-mail: desoski@fima.com.mk
 E-mail: dsmolar@fima.com
                              Ivica Jovanovski
                              Deputy CEO FIMA FAS Macedonia
                              Tel: +389 2 3 223142
                              Fax: +389 2 3 215670
                              E-mail: jovanovski@fima.com.mk



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