Sortis Invest Presentation 20090715 En

SORTIS INVEST Corporate Presentation

Sofia

July 2009

Overview SORTIS Invest is financial and investment advisor to businesses, venture capital and private equity funds, institutional and individual investors for their activities in Bulgaria.  Areas of expertise :    

Private equity & venture capital Mergers & acquisitions Corporate finance EU grants funding programs

 SORTIS Invest structures investment schemes that enable:  Investors to benefit from attractive business opportunities  Entrepreneurs to implement their investment plans

 Experienced team in equity investments, real restructuring projects in Bulgaria and internationally

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 Proven reputation and professional ethics  Owned and managed by Martin Paev, CFA – an investment banker with significant M&A, private equity, asset management and real estate experience Corporate Presentation

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SORTIS Group SORTIS Invest is part of the SORTIS Group that also comprises:

Real Estate Investment Management Company with expertise in:    

Real estate investment advisory Real estate portfolio management Property fund management Mezzanine real estate financing

SORTIS Real Estate structures individual and collective investment schemes that enable its client-investors to benefit from the real estate opportunities the company has sourced and secured. Active in all major real estate sectors, including residential, office, retail, industrial and hotels.

Credit and Leasing Advisory Company with expertise in:     

Mortgage loans Investment loans Consumer loans Leasing Refinancing

SORTIS Credit offers advisory services for bank loans and leasing to businesses and individuals.

Partnership agreements with the leading commercial banks, leasing companies and non-bank financial institutions in Bulgaria.

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Services  SORTIS Invest assists entrepreneurs in selecting and obtaining the most appropriate type of financing for their investment plans  SORTIS is able to arrange the full spectrum of financing options and secure100% of the investment needed through:     

Private equity Venture capital Mezzanine loans Bank loans and other debt capital; leasing EU grants funding

 Additional services to corporate clients include consulting on:  Mergers & acquisitions  Corporate finance  Company restructuring

 SORTIS Invest also works on behalf of investors to identify high-yield investment opportunities that match predefined investment criteria Corporate Presentation

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Private Equity  In a private equity or venture capital deal the investor:    

Buys shares in the investee company Does not receive regular installments like interest on loans Assumes part of the business risk of the entrepreneur Makes money only when the entrepreneur also makes money

 Venture Capital is given to growing companies that need external financing in order to continue their expansion  Private Equity investors look for profitable and cash-flow positive companies  Sources of funding:     

Strategic Investors Venture Capital Funds Private Equity Funds Buyout Funds “Business Angels”, etc.

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Mezzanine Loans  Mezzanine financing is a way of attaining financing without ceding ownership of the company. It is a blend of traditional debt financing and equity financing, reaping some benefits of both  Mezzanine financing is an unsecured debt, requiring no collateral to be put up, unlike traditional bank loans  Like debt, mezzanine financing is very fluid and does not necessarily involve giving up an interest in the company  Very high interest rates - often in the 20-30% range  Lenders often have the right to convert their stake to equity ownership in the event of a default on the mezzanine loan  Mezzanine financing facilitates bank financing for the project, as it is subordinated to the senior debt

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Project Finance  Project Finance is financing for a particular project (such as a mine, toll road, railway, pipeline, power station, etc.) which is repaid from the cash flow of that project  The financier principally looks at the assets and revenues of the project in order to secure servicing of the loan on a stand-alone basis  Little or no recourse to the non-project assets of the borrower or the sponsors of the project  The credit risk associated with the borrower is not as important as in ordinary loan transactions  Identification, analysis, allocation and management of every risk associated with the project is of paramount importance

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Corporate Finance  SORTIS Invest helps its corporate finance clients to maximize the value of their companies while keeping an eye on the firm's financial risks  Corporate Finance Services:  Mergers and Acquisitions  Business sales and disposals  Public company and take-over advice  Management buy-outs  Management buy-ins  Strategic alliances  Valuations, fairness opinions and appraisals  Debt-raising and restructuring advice

 SORTIS assists companies in their strategic choices aimed at growth, market penetration and/or exit

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EU Grants Funding  SORTIS Invest assists companies in obtaining grant financing from EU’s Operational Programmes that are active in Bulgaria  The SORTIS EU Grants services include:  Eligibility evaluation  Competent choice of the most appropriate scheme for the Client’s project  Preparation of a professional business plan and financial model that demonstrate explicitly the project’s business sense and profitability  Putting together the physical application and organizing all necessary documentation  Assistance in attracting the needed co-financing – securing 100% of the investment required to implement the project

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Approach  Before taking a mandate and presenting an investment opportunity to potential investors, SORTIS Invest makes an internal assessment of the project in order to determine its:  Feasibility  Bankability and finance-ability  Project Sponsor’s creditworthiness

 SORTIS Invest suggests a financing structure, which best serves the Client’s interests and at the same time meets the investment policies and requirements of potential funders  Equity  Mezzanine loans  Project financing

 Credibility and trust are a main factor in the decision making process of all financial investors  Investors heavily rely on the discretion of SORTIS Invest in selecting and proposing them high-quality projects Corporate Presentation

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Pre- & Post- Investment Support  SORTIS helps its advisory clients determine and refine a winning business strategy and then implement it  Business strategy is determined based on assessment of the Client’s competitive position and taking into consideration global and local market conditions and long-term trends  Careful analysis of:  Competitive advantages of the Client  Problem areas  Strategic positioning  Market trends  Project characteristics

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Investment Funds  SORTIS Invest has built up an extensive network of investment funds comprised of:  Private equity funds  Buy-out funds  Mezzanine funds  Venture capital funds  Seed capital funds  Business angels  High net worth individuals

 Network of ca. 120 investment funds throughout countries in Europe, North America, Middle East and Asia  SORTIS’s relationships with a wide range of investment funds facilitates investment process by finding the optimal solution for the Client Corporate Presentation

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Funds Investment Criteria  Partnering funds bring to companies and businesses exposure to a broad variety of investment criteria:  Equity investment size: from €1mln to € 150+mln  Investment horizon: usually 3 to 7 years, maximum 15 years  Variety of sectors on focus  Ownership stake: controlling, majority or significant minority  Transaction types: leveraged buy-outs, management buy-outs and buyins, growth capital, seed and early-stage

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Strategic Investors  SORTIS Invest works with a network of strategic investors that could convey to companies and businesses substantial benefit by:  Adding value to investments  Strategic partners that operate in major industries such as healthcare, telecommunications, technology, retail, food processing, beverages, etc.  Providing industry know-how and business expertise  Strategic investor may possess a brand name recognized in many countries  Strategic investor typically brings to the firm valuable experience in marketing, operations and sales  Providing valuable training to company employees and management  Strategic investor also provides industry and personal connections that are beneficial for bringing in additional capital and/or assisting with the sale of the company's products and services

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Management Mr. Martin Paev, CFA Born 1975, Bulgarian Owner and General Manager Martin Paev has 10+ years of investment banking, M&A and asset management experience gained at the ING Barings investment bank in Frankfurt/Main (Germany), ETEBA (the investment banking arm of National Bank of Greece), Balkan Advisory Company (an independent investment banking boutique in South-Eastern Europe). Mr. Paev structured the first Real Estate Investment Trust in Bulgaria (TBI-BAC REIT) and acted as the REIT’s Executive Director from its establishment until he joined ADDRESS Group as Executive Director of ADDRESS Investment & Development in 2005. In November 2006 he established his investment advisory firm, SORTIS Invest. In March 2007 SORTIS Real Estate was set up as a real estate asset management and investment advisory company. Educated in Bulgaria, the Netherlands and Germany, Mr. Paev holds a Master’s degree in Banking and Finance and a Bachelor’s degree in Business Administration. He is CFA® Charterholder and served two mandates as Board member of the Bulgarian CFA Society. Corporate Presentation

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Key Team Members Dimcho G. Dimitrov, Investment Banking Associate, brings experience to the SORTIS team in strategic market research, analysis and forecasting, new product market sizing through financial modeling and company due diligence on M&A transactions. Prior to joining SORTIS, Dimcho was Strategy Analyst with W. R. Grace & Co., a $3B public specialty chemicals company, where he provided analytical support for the organic and external growth initiatives of the organization. Mr. Dimitrov holds a Master of Business Administration (MBA) degree from Northeastern University, Boston, USA. Krasimir Goranov, Investment Banking Associate, is an expert in finance and accounting, including investment analysis, project and company valuations, hedging and risk control and portfolio management. Prior to joining SORTIS Invest, Krasimir worked in the US as a Financial Analyst for Q Investments, L.P., a privately-held hedge fund with $2.7B of assets under management. Mr. Goranov held similar positions also at Bear Stearns & Co. and William C. Connor Educational Investment Fund. Mr. Goranov completed his Bachelor’s degree in Accounting and Finance at Texas Christian University, Fort Worth, USA.

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Track Record Selected private equity and venture capital deals:

Speedy Net WiMax Telecom Operator

LAN Internet Provider

Risk Management Software

Investor: Dekol

Investor: Advance Equity Holding

Investor: New Europe Venture Equity (NEVEQ)

Amount: € 4,000,000

Amount: $ 5,000,000

Financial Advisor to Speedy Net

Financial Advisor to FinAnalytica

December 2007

March 2008

Amount: n.a. Financial Advisor to Atlantis.bg (Project Sponsor) August 2007

As well as projects in food processing, retail trade, information and communication technologies, healthcare and other sectors. Corporate Presentation

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Contacts

Mr. Martin Paev, CFA General Manager

E-mail: [email protected] Cell: +359 88 50 50 200 49 Madrid Blvd., Floor 1 Sofia 1505, Bulgaria

Tel: +359 2 943 90 70 Fax: +359 2 943 90 71

www.sortis.bg Corporate Presentation

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