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Dr. Gerhard Grund Member of the Board, RCB November 2006

Dr. Gerhard Grund Member of the Board, RCB November 2006. 60000. 53,524. CEE. 50000. Thereof Fin. 40000. Sponsors. 30000. 24,602. 20000. 12,845. 10000. 2,952. 0. 2005. 2004. Private Equity Activity in Eastern Europe. M&A Volume in Eastern Europe. Overview.

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Dr. Gerhard Grund Member of the Board, RCB November 2006

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  1. Dr. Gerhard Grund Member of the Board, RCB November 2006

  2. 60000 53,524 CEE 50000 Thereof Fin. 40000 Sponsors 30000 24,602 20000 12,845 10000 2,952 0 2005 2004 Private Equity Activity in Eastern Europe M&A Volume in Eastern Europe Overview • Within growing M&A Volumes (+9%), private equity driven M&A deals grew even faster during the first nine months of 2006 (+28%) • The enlargement of the European Union in 2004 and the upcoming entry of Bulgaria and Romania in 2007 has attracted private equity to enter the Eastern European region • More developed Eastern European markets even attract Venture Capital, although deal sizes remain low • Increasing number of buy-outs with the ability of debt financing (up to 5.0x Debt/EBITDA). Less developed markets such as Russia or Ukraine focus on expansion finance and simpler industries (consumer products, telecoms) • Distressed assets / debt driven M&A deals become attractive to hedge funds In 2005, overall M&A activity in Eastern Europe doubled, whilst private equity driven M&A has quadrupled, reaching 25% of all M&A transactions Positive economic and regulatory developments have stirred up interest in private equity in Eastern Europe *CEE: Albania, Bosnia, Belarus, Bulgaria, Croatia, Czech, Estonia, Georgia, Hungary, Latvia, Lithuania, Macedonia, Moldova, Poland, Romania, Russia, Serbia, Montenegro, Slovakia, Slovenia, Ukraine PE Deals in Volume in Eastern Europe 2004 (mEUR) 2005 (mEUR) Source: Thomson Financial, Bureau van Dijk, Mergermarket, Dealogic

  3. Private Equity by Type EE Investments by Type 2004 Comments Private Equity capital in Eastern Europe concentrates mainly on expansion and buyout transactions In Eastern Europe, seed and start-up investments are almost not existent • Focus in Eastern Europe primarily on mature investments (replacement capital, buy-outs) • Compared to Western Europe, early stage financing is less developed • Traditional buy-out sectors in Eastern Europe are: • Telecoms (fixed mobile) and telecom infrastructure (towers, cable) • Media (both new and old media) • Energy (electricity and heat power, renewables) • Heavy industries (mining, heavy manufacturing) • Logistics (airports, transport) • Food and beverages • Real estate European Investments by Type 2004 Source: European Venture Capital Association

  4. Key Issues / Trends by Region • Common factors • Sourcing of deals primarily from privatisations and first round “oligarchs“ • Only few organically grown businesses critical in size for buy-outs • Venture capital opportunities in niche areas • For early stage companiescapital markets exit only in Poland and to a lesser extent in the Czech Republic and Hungary • In many EE-Countries private equity financing is still underdeveloped CIS • Regional dominance by Russia and dependence on Russian trade • Economic growth 06e: 6.1% • Unstable political environment as a major risk • Local funds / investment banks with both local and international funding CEE • Stable economic situation (Growth rate 06e: 5.0%) • Despite EU membership and economic growth political risks remain • Venture capital begins to grow • Most major international funds consider opportunities in CEE SEE • Strong economic growth (06e: 5.3%) • Ongoing privatizations • Expected EU entry of Romania and Bulgaria in 2007 • EU accession process launched in in a number of SEE countries • Low taxes in certain countries (Serbia, Romania 10%) • High level of corruption is a major risk • Specialized SEE funds active

  5. Deals and Funds Raised in 2005 - 2006 In 2006, more than EUR1.5bn of new funds are expected to be raised for private equity investments in the region One of the largest deals in Eastern Europe is the ongoing bid by Permira to acquire the Hungarian chemicals company BorsodChem Source: Factiva

  6. Privatisations / Secondary buy-outs Other opportunities Outlook / Potential Investment Areas

  7. For further information please contact: Dr. Gerhard Grund Member of the Board E-mail: grund@rcb.at T +43 (0) 1 515 20 301 F +43 (0) 1 515 20 5301 Raiffeisen Centrobank AG A-1015 Wien Tegetthoffstraße 1 E-mail: office@rcb.at T +43 (0) 1 515 20 0 F +43 (0) 1 513 43 96 Heinz Sernetz Member of the Board E-mail: h.sernetz@raiffeisen-investment.com T +43 (0) 1 710 54 00 13 F +43 (0) 1 710 54 00 25 Raiffeisen Investment AG A-1015 Wien Tegetthoffstraße 1 E-mail: office@raiffeisen-investment.com T +43 (0) 1 710 54 00 60 F +43 (0) 1 710 54 00 25 Peter Köhler Director, Financial Sponsors E-mail: p.koehler@raiffeisen-investment.com T +43 (0) 1 710 54 00 46 F +43 (0) 1 710 54 00 69

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