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OPENING THE DOOR IN THE EAST TO WESTERN CAPITAL

OPENING THE DOOR IN THE EAST TO WESTERN CAPITAL. Alexander Aginsky Aginsky Consulting Group. Presentation Outline. Who is ACG? Regional highlights: why go to Russia? Motivation for collaboration Sample western financing options What do investors look for? Conclusion. Who is ACG?.

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OPENING THE DOOR IN THE EAST TO WESTERN CAPITAL

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  1. OPENING THE DOOR IN THE EAST TO WESTERN CAPITAL Alexander Aginsky Aginsky Consulting Group

  2. Presentation Outline • Who is ACG? • Regional highlights: why go to Russia? • Motivation for collaboration • Sample western financing options • What do investors look for? • Conclusion www.aginskyconsulting.com

  3. Who is ACG? • Headquartered in U.S. – West Coast • Boutique and entrepreneurial firm • Industry agnostic • Geographic specialization in markets of Russia and CIS • Staffed by MBA graduates from top-tier U.S. business schools (Harvard, Yale, Thunderbird, Columbia, etc.) • Customized project teams for each individual client engagement • International project implementation experience www.aginskyconsulting.com

  4. ACG Service Offering Wide range of consulting services Business services • Market and industry study; • Competitive landscape analysis; • Business strategy development & planning; • Distribution and channel partnership building; • Emerging markets product/service launches; Financial services • Conversions of Russian financials into US GAAP; • Due diligence and enterprise valuations; • Financial projections and ratio analysis; • Investor solicitation – roadshows; • M&A advisory and deal structuring. www.aginskyconsulting.com

  5. Regional Highlights FDI into Eastern Europe and the CIS: • 2007: the highest-ever levels of foreign direct investment (FDI) in the region. • Foreign investors injected some $69 billion into the region last year, up by 56% compared to 2005, with Russia receiving the lion's share. (World Bank) www.aginskyconsulting.com

  6. Why go to Russia? www.aginskyconsulting.com

  7. Reasons for American companies to invest in the CIS • Grow revenues • Lower overhead costs • Higher prices + Lower costs = Greater margins • Limited/declining home market or excess capacity • Global competition • Gain access to a distribution network • Broaden an existing product portfolio • Global branding, exposure and geographic reach • Diversify global risks www.aginskyconsulting.com

  8. Reasons for CIS companies to solicit Western partners/investors • Capital for rapid expansion • Lower transaction & financing costs • Cheaper regional financing as a result • Access to global markets through new partners (New distribution and sales channels) • Improved reputation, marketability, & credibility • Industry expertise and knowledge transfer www.aginskyconsulting.com

  9. Sample western financing options • International development banks • Government organizations • Lending institutions • Investment banks • Strategic alliances • Private equity & hedge funds www.aginskyconsulting.com

  10. Development banks • In 2006 the IFC (World Bank) committed and mobilized more than $2.1 billion for the regions of Europe and Central Asia • In 2006, the EBRD Invested 1.9 billion euros into Russian enterprises. It is also the largest financial investor in Ukraine. www.aginskyconsulting.com

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  13. Government organizations • OPIC: Since 1992 it has provided more than $3.8 billion in finance and insurance for a total of 115 projects in Russia. • EXIM Bank: authorizations for Russia average $150 MM annually. Outstanding portfolio of approximately $1.4 billion for all three of their products – insurance, direct loans, and bank guarantees. www.aginskyconsulting.com

  14. Lending institutions Western banks with a substantial presence in Russia: • Raiffeisenbank • Unicredit • PNB Parisbas • Citibank • Deutsche Bank www.aginskyconsulting.com

  15. Investment banks • UBS • Merril Lynch • Goldman Sachs • JP Morgan • Morgan Stanley www.aginskyconsulting.com

  16. Strategic alliances • TNK-BP • Conoco Phillips-LUKoil • GM-AvtoVaz • Boeing-VSMPO-Sukhoi www.aginskyconsulting.com

  17. Private equity Bearing Vostok, AIG Interros, Franklin Templeton, Quadriga Capital, Mint Capital, Eagle Venture Partners, Russia partners, Breeze Venture Management. • The Emerging Markets Private Equity Association (EMPEA) reported that: of all private equity groups surveyed, 61% intended to invest in CEE/Russia in 2007, and as much as 87% by 2012. www.aginskyconsulting.com

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  19. What do investors look for? (intangible) • Long-term vision • Successful track record • Language and cultural understanding • Transparent dealings • Professional management team • Professional advisers (accountants, attorneys, consultants, etc.) www.aginskyconsulting.com

  20. What do investors look for? (tangible) • Reconciliation (US GAAP) of financial statements • Financial projections • Detailed third party due diligence • Corporate, financial, legal audit • Business plan • Market research • Valuation • NPV, IRR, and Payback period analysis • Investor PowerPoint presentation • Private Placement Memorandum – PPM • Term sheet • Subscription agreement www.aginskyconsulting.com

  21. Conclusion • The time for cooperation between U.S. and Russia has never been better. • Plenty of resources on both sides to be taken advantage of. • Have a clear strategy and an end result in mind. • Know the process and requirements for getting to that end result. • Rely on experts who can “bridge” the needs and wants of all parties internationally. www.aginskyconsulting.com

  22. For a copy of this presentation please contact us directly.Thank you AGINSKY CONSULTING GROUP, LLC. WEB: www.aginskyconsulting.com EMAIL: info@aginskyconsulting.com TEL: 877-WITH-ACG

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