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  • 1. Restructuring solutions in Ukraine August 2010
  • 2. Restructuring solutions in Ukraine | August 2010 Introducing Grant Thornton Key facts Grant Thornton Ukraine* member firm of Grant Thornton International since 2005 established in 1999 5 partners 70 professional staff Grant Thornton International affiliated member firms in 100 countries 500 offices worldwide over 30,000 staff 2,500 partners total member firm revenue in 2009 - US$3.6 billion *Grant Thornton Ukraine is the Ukraine member firm of Grant Thornton International, one of the world's leading international organisations of independently owned and managed accounting and consulting firms. Although Grant Thornton International is not a worldwide partnership, the firms share a commitment to providing the same high quality service to their clients wherever they do business. © 2010 Grant Thornton UK LLP. All rights reserved. 1
  • 3. Restructuring solutions in Ukraine | August 2010 Grant Thornton service offering in Ukraine • Assurance services • Tax advisory services • Corporate finance services − transaction advisory − valuation (in conjunction with Grant Thornton Russia) − M&A • Recovery & reorganisation (in conjunction with Grant Thornton UK) • Forensic investigation services (in conjunction with Grant Thornton UK) • Project finance (incl. infrastructure) and PPP/PFI advisory services • Business risk advisory services • Outsourced accounting and payroll services © 2010 Grant Thornton UK LLP. All rights reserved. 2
  • 4. Restructuring solutions in Ukraine | August 2010 Grant Thornton restructuring solutions in Ukraine • Joint team incorporating Ukrainian local knowledge and experienced UK leadership • Company side roles include working capital and operational improvements • Creditor side roles include independent business reviews and advice on financial restructuring and insolvency • Over 50 member firms undertake restructuring and/or insolvency projects across many onshore and offshore jurisdictions • Large valuation team in Russia values collateral and where the "value breaks" in capital structures • Strong Ukrainian, Russian and international experts in many industry sectors • Ukrainian and international tax advisory services • Ukrainian and international (accelerated) M&A services • Forensic teams for investigations and global asset tracing • External links to interim and replacement management and turnaround financing © 2010 Grant Thornton UK LLP. All rights reserved. 3
  • 5. Restructuring solutions in Ukraine | August 2010 Restructuring and turnaround services Debtor Advisory Creditor Advisory Preserving enterprise value Maximising enterprise value • Operational turnaround • Independent business reviews • Profit improvement programmes • Financial restructuring • Exit strategy services • Refinancing • Project management/implementation • Distressed M&A • Formal insolvency appointments* • Asset tracing Recovery & Reorganisation Services Working Capital Management Saving enterprise value Strategic Valuation/Assessment • Crisis stabilisation Measuring and increasing enterprise value • Short-term viability assessment • Business valuation • Cash flow management • Strategic performance reviews • Liquidity improvement strategies • Strategic planning • Receivables management • Financial modelling * Accountancy firm partners take formal insolvency appointments in certain jurisdictions, but not Ukraine © 2010 Grant Thornton UK LLP. All rights reserved. 4
  • 6. Restructuring solutions in Ukraine | August 2010 Restructuring Advisory & Implementation Services Operational and strategic improvement requires us to review, recommend and implement change programmes with an industry-specific, integrated, multi-service offering, focussing on the following main areas: • turnaround, integration and separation planning and implementation • operational reviews (for inclusion in Independent Business Reviews) • operational due diligence • financial management performance • cost optimisation • strategy, management and organisation assessment • IT and technology assessment • market assessments • procurement, logistics and shared services assistance © 2010 Grant Thornton UK LLP. All rights reserved. 5
  • 7. Restructuring solutions in Ukraine | August 2010 Rescue attempts? • Revise loan terms and “kick the can down the road” • Seek government support if “too big to fail” • Trading out of insolvency, reduce costs • Obtain fresh capital, but owners dislike losing control • Sale of the business to new owners • Propose an (offshore) debt/equity conversion or seek a local informal moratorium • Re-assess strategy, right size the business for chosen segments © 2010 Grant Thornton UK LLP. All rights reserved. 6
  • 8. Restructuring solutions in Ukraine | August 2010 Refinancing assistance • quickly understand the company's current business, projections and liquidity situation; • assess with management whether the future business can support the current level of debt or some form of compromise might be needed; • prepare a long list of financial institutions likely to be interested to fund the business, given its situation, sector and geography; • agree with management a controlled process of teaser communication with a short list of potential funders; • review the balance between new debt, equity and/or possible state aid; • NDAs and deeper data access for serious parties; • careful management of communications with existing stakeholder groups, who may have differing interests and objectives • working with the corporate legal and finance teams to negotiate term sheets and transition to the revised financing structure. © 2010 Grant Thornton UK LLP. All rights reserved. 7
  • 9. Restructuring solutions in Ukraine | August 2010 Restructuring & Recovery solutions in more detail Turnaround and restructuring Independent Business reviews Multi-disciplinary teams work to stabilise management We carry out independent reviews of company and stakeholder relations, assess viability, cash flow viability and management's forecasts and assumptions. and working capital needs, help develop and We report findings, conclusions and recommendations, implement new business strategies, divest non-core including improvement steps and creditor exit options. businesses and design new capital structures. Exit strategy services Accelerated M&A A tailored methodology to plan the restructuring, sale, Grant Thornton teams have the experience to or managed closure of a group, or core/non-core division project manage purchase or sale transactions within to balance asset realisation values against potential weeks when necessary, bringing together insolvency, recovery, cross-border tax, stakeholder and PR risks. corporate finance and tax specialists. Strategic performance reviews New finance and management Strategic performance reviews by industry specialists Grant Thornton has relationships with banks, private analyze the key drivers of competitive market performance equity and hedge fund financiers. We can also source and provide a framework to evaluate financial and external interim or replacement management when needed. operational improvement options. © 2010 Grant Thornton UK LLP. All rights reserved. 8
  • 10. Restructuring solutions in Ukraine | August 2010 Valuation services Valuation services Purchase price allocation Litigation and dispute Commercial Restructuring Investment projects IFRS valuation Determining the value of Providing advice within Disposals, acquisition, Providing valuation Valuation of land plots, Providing valuation intangible assets and the field of dispute mergers – providing advice to banks and investment property for advice for companies subsequent impairment resolution, litigation valuation advice corporates in the context banks, investment and with the first time testing support and expert including fairness of restructuring and financial companies adoption if IFRS valuations opinions for shareholders reorganisation and corporates, both listed and unlisted © 2010 Grant Thornton UK LLP. All rights reserved. 9
  • 11. Restructuring solutions in Ukraine | August 2010 Debt for Equity Pro's Con's Debt holder return more commensurate with risk Timeframe Balance sheet gearing improved May be non-consensual as stakeholders have nothing to gain: disenfranchised = insolvency process Suppliers and creditors perception of business improved Court and Insolvency Practitioner = complexity and cost Avoids distressed realisation of value Debt converted ranks behind unsecured creditors Stable platform for the business Equity arm of Banks become involved - different agendas ? Management can be incentivised Management distraction Time to negotiate Valuation/marketing: SIP 16 Avoids insolvency process (benefits vs loss of control?) Impact on business/ execution risk Hard-ball of sophisticated equity holders/other lender groups Attitude of tax authorities to the transaction © 2010 Grant Thornton UK LLP. All rights reserved. 10
  • 12. Restructuring solutions in Ukraine | August 2010 Experience of managing stakeholder diversity is vital Suppliers Suppliers Government Government Credit insurers IMF/EU IMF/EU Public opinion Credit insurers Public opinion Customers Customers Regulators Regulators Competitors Competitors Other creditors Other creditors Company Company Employees Employees Management Management Liquidator (s) Liquidator (s) Shareholders Shareholders Junior lenders Junior lenders Senior lenders Senior lenders Hedge funds Hedge funds © 2010 Grant Thornton UK LLP. All rights reserved. 11
  • 13. Restructuring solutions in Ukraine | August 2010 Benefits of working with Grant Thornton Global reach: local touch Bespoke client service Integrated multi-disciplinary implementation service • premium comprehensive • higher ratio of partner time restructuring offer combining • seamless offer of financial and Ukrainian firm transaction and • involved roles in businesses operational restructuring, corporate Russian firm valuation experience where appropriate advisory and tax with UK firm restructuring expertise • dedicated resource • solutions based services within • substantial investment in our one department – accessibility international coverage (Europe, • full service from diagnosis/strategic US and Asia Pacific are key development to implementation • broad resource base of in-house territories) sector specialists • cost and equity fee structures to share • seamless service around the risk • dedicated operational capability with the world senior line management experience © 2010 Grant Thornton UK LLP. All rights reserved. 12
  • 14. Restructuring solutions in Ukraine | August 2010 Industry specialisms Automotive Shipping/Airlines Construction and property Engineering and components Financial markets Food and agriculture Haulage and logistics Telecoms and technology Hospitality and leisure Natural resources Retail Healthcare © 2010 Grant Thornton UK LLP. All rights reserved. 13
  • 15. Restructuring solutions in Ukraine | August 2010 Complex restructuring experience Bell Leisure Investments Basis Yield Alpha Fund Del Monte (Master) Projector SA Moat House Hotels My Travel No.1 and 2 Restructuring Administrators of Holding My Travel Companies Hedge Fund Oil trader and ship broker Financial Restructuring Fresh produce supplier Health and Fitness clubs International Hotel & Financial Restructuring €230 million debt US$1 billion FUM Debt $300m Leisure group €300 million turnover Debt £330m £2.4bn debt, £4.4bn t/o 2005-7 2008 - Ongoing 2007 - Ongoing 2008 - Ongoing Debt £1.3 billion 2004-6 Grant Thornton provided Grant Thornton is providing Partners of Grant Thornton Partners of Grant Thornton are Grant Thornton provided Grant Thornton provided International firms acted as providing restructuring advisory restructuring advisory services creditor advisory services liquidators financial advisory services restructuring advisory services services Madoff Securities Administrators & Senior Saad Investment International Securities International Ltd Marconi Kenmore Property Group Project Elba Lenders Limited Company Trading Corporation Marconi Real Estate investment & Hotel Investment Vehicle Provisional Liquidators Liquidation Lender of capital to financial Development Restructuring institutions $50bn Investment Fund Financial Restructuring Financial Restructuring Investment Fund 'Ponzi' Scheme £1.2bn debt $500m debt £1bn debt, £1.5bn t/o Debt £3.2 billion €3 billion FUM 2008 - Ongoing 2005-6 2009 - Ongoing 2010 - ongoing 2009 - Ongoing Dec 2007 - ongoing Grant Thornton UK LLP are Grant Thornton UK LLP provided Partners of Grant Thornton are Grant Thornton provided Partners of Grant Thornton UK LLP Grant Thornton UK LLP are restructuring advisory services to the acting as provisional liquidators restructuring advisory services appointed Administrators advising creditors appointed as Liquidators Examiner of ISTC © 2010 Grant Thornton UK LLP. All rights reserved. 14
  • 16. Restructuring solutions in Ukraine | August 2010 Restructuring credentials – Russian and Ukraine media Situation Outcomes Russian media • Major Russian and Ukrainian media • Grant Thornton developed a business contingency plan for provisional • Economic slowdown caused loss of liquidation appointments in key offshore revenues and enterprise value jurisdictions including Cyprus, Luxembourg and British Virgin Islands. • Non-payment of overseas bond interest Financial restructuring triggered default • Our potential appointment by the company as provisional liquidators was Russian & Ukrainian media business • Consensual restructuring of long-term kept on hold throughout the T/o: n/a liabilities sought by the group's financial restructuring negotiations to act as Debt: n/a advisers to restore balance sheet strength deterrent against individual creditors taking unilateral enforcement action, which might trigger a loss of value and Grant Thornton UK, Grant Thornton control Ukraine and Grant Thornton Russia provided debtor advisory services • Project is ongoing © 2010 Grant Thornton UK LLP. All rights reserved. 15
  • 17. Restructuring solutions in Ukraine | August 2010 Restructuring credentials – Russian and CIS transport Situation Outcomes Russian Transport • Russian and CIS shipping, port and rail • Grant Thornton provided assistance to logistics business the Senior Lenders in connection with a • Consensual restructuring of long-term review of the financial forecasting model liabilities and new funding sought by the which was being used as the cornerstone group of the proposed financial restructuring Financial restructuring Russian transport business T/o: n/a Debt: $1.2 bn Grant Thornton UK and Grant Thornton Russia provided creditor advisory services © 2010 Grant Thornton UK LLP. All rights reserved. 16
  • 18. Restructuring solutions in Ukraine | August 2010 Restructuring credentials – Russian gas Situation Outcomes Russian gas • Russian gas development group • Assessed asset and liability position and • Economic crisis and fall in oil and gas negotiated a standstill agreement prices made exploitation of new gas between the various creditor groups reserves uneconomic while a longer term strategy was developed Financial restructuring • Default triggered through non- payment of offshore bond interest • Monitored cash position and maintained Russian gas development business and Russian bank debt interest. other important licensing conditions to avoid local bankruptcy petition or loss of T/o: n/a • Formal insolvency appointment made control over the business Debt: n/a over offshore holding company • Developed an asset realisation strategy for the gas reserves Grant Thornton UK and Grant Thornton • Project is ongoing Russia provided creditor advisory services © 2010 Grant Thornton UK LLP. All rights reserved. 17
  • 19. Restructuring solutions in Ukraine | August 2010 Restructuring credentials – European hotel group Situation Outcomes European Hotel Group • A chain of luxury branded hotels • Key elements of the work included, a detailed review located throughout Europe of recent forecast trading of each hotel, assessment of • Trading underperformance and fall in portfolio performance by reference to Group KPIs, property prices led to the Group benchmarking across the estate and local competition being under-capitalised and marketing activities and a review of the Financial restructuring appropriateness of requested CAPEX spend • Default triggered through non- Branded Hotel Group payment of bank debt interest • We advised on inter-alia; whether a hold or early exist option was most favourable, the relative merits and Debt: c.€0.8bn • Grant Thornton UK LLP were adequacy of the Group's planned CAPEX appointed to assist the Lender in programme, the adequacy of the management assessing its position and future contracts between the owners, the asset managers and lending strategy to the Group the operators and the tax position across each Grant Thornton UK, Spain, France, Netherlands, jurisdiction Switzerland, Germany and Luxembourg provided creditor advisory services • Following the above we provided assistance to the Bank with its implementation strategy which included bid support, tax due diligence and facilitation of the wider due diligence process and migrating systems • The project is ongoing © 2010 Grant Thornton UK LLP. All rights reserved. 18
  • 20. Restructuring solutions in Ukraine | August 2010 Restructuring credentials – Distressed Real Estate Situation Outcomes Project Light Blue • Grant Thornton UK LLP is retained • Grant Thornton has an ongoing role to: to provide strategic restructuring − provide strategic restructuring advice to the advice to the Shareholders and Shareholders and Directors Directors of a privately held family group with a significant real estate − develop restructuring proposals for the group Restructuring investment and development arm − assist in the negotiations with the companies' main Privately held family group • The development arm of the business lender has current and future projects across the UK totalling over £500m and Debt: c.£800m encompassing almost 3m sq ft of floor space • Declining yields in its investment Grant Thornton UK is advising the Directors property portfolio drove the business towards development projects many of which were stalled by the "credit crunch" © 2010 Grant Thornton UK LLP. All rights reserved. 19
  • 21. Restructuring solutions in Ukraine | August 2010 Restructuring credentials – Property Investment Fund Situation Outcomes R2 Property Fund • Investment Fund formed to • Advised on the restructuring of the undertake six large holiday home, complex structure of the property hotel and facilities developments in development funds based in Jersey Bulgaria, Croatia and Montenegro • Developed an asset realisation strategy • Court hearings instigated by the Jersey • Project is ongoing Financial restructuring Financial Services Commission Eastern European Property Fund • Existing functionaries removed • Grant Thornton UK LLP partner appointed as adviser FUM €54.5 million Grant Thornton UK and Grant Thornton Russia provided creditor advisory services © 2010 Grant Thornton UK LLP. All rights reserved. 20
  • 22. Restructuring solutions in Ukraine | August 2010 Ukraine partners and staff Vitaliy Kazakov Managing partner, Grant Thornton Ukraine • Vitaliy is the managing partner of Grant Thornton Ukraine. He is responsible for development of corporate finance services in the Ukraine, including valuation, raising finance, due diligence, and M&A. • Prior to joining Grant Thornton in 2005, Vitaliy worked as a financial management specialist at the IBRD covering energy, utility and infrastructure project investments across Ukraine, Belarus and Moldova. • He also worked for USAID on an accounting reform project after gaining his ACCA qualification with a Big 4 firm. He holds an MBA from the Ukraine State University of Economics. Anna Gurzhii Manager, Grant Thornton Ukraine • Anna has a degree in International economy and management and a Masters degree in international accounting. Her experience with the firm includes audits and various sectors including oil and gas, manufacturing and auto retail. • She has also worked on several projects for the EBRD related to municipal infrastructure finance and IFRS audits. © 2010 Grant Thornton UK LLP. All rights reserved. 21
  • 23. Restructuring solutions in Ukraine | August 2010 Ukraine partners and staff Alexander Borisov Partner, Grant Thornton Ukraine • Alexander is the tax partner in the Kiev office and works closely with the advisory services team on merger and acquisition, due diligence assignments and dispute proceedings assignments for large and medium sized Ukrainian and international companies • Alexander has been a partner in Grant Thornton Ukraine since 2001. • His sector experience includes oil and gas production, construction, banking and insurance, energy and utilities. Tetyana Stretovych Tax Manager, Grant Thornton Ukraine • Tatiana is responsible for the tax department for external clients and for tax inputs during audit assignments. • Prior to joining Grant Thornton, Tatyana was internal auditor at a large construction and real estate conglomerate, and a Ukrainian accounting firm where her experience included bankruptcy proceeding analysis. © 2010 Grant Thornton UK LLP. All rights reserved. 22
  • 24. Restructuring solutions in Ukraine | August 2010 Grant Thornton – joint team members Mark Byers Partner, Recovery & Reorganisation • Mark has wide experience of corporate finance, investigation, due diligence and advisory work. He has worked extensively on advising large banking syndicates to financially distressed businesses in the UK, Europe and the US. In 2003 he became global head of Recovery and Reorganisation across the Grant Thornton International network. • Mark and other Grant Thornton UK partners will lead financial and strategic restructuring analysis and stakeholder negotiations. Nigel Davies Associate Director, Recovery & Reorganisation • Nigel coordinates the development of the 55 Grant Thornton International member firms authorised to undertake Recovery and Reorganisation projects. Nigel has significant international experience, having lived for 10 years in Western and Eastern Europe while with a Big 4 firm, leading a variety of restructuring and corporate finance projects. • He has a specific role to assist Grant Thornton Russia with the origination and resourcing of restructuring projects across Central and South East Europe and the CIS. © 2010 Grant Thornton UK LLP. All rights reserved. 23
  • 25. Restructuring solutions in Ukraine | August 2010 Grant Thornton – joint team members Alexander Ivanov Partner, Valuation • Alexander Ivanov has over 12 years experience in the valuation of real estate and businesses, as well as investment consulting. • He is CCIM, CPM, Certified appraiser of the Russian Board of Appraisers, Master of valuation and also has State certificate (appraisal) of the 2nd (highest) degree. Elena Dmitrieva Partner, Valuation • Elena is a graduate from the Moscow Finance Academy. She is a certified appraiser of the Russian Board of Appraisers. She has gained her experience in providing appraisal activities since 1999, and specialises in valuing real estate and businesses, including agro-business, food production, energy, oil and gas sectors. • Among her clients are such major companies as Nutritek Group, Cherkizovo Group, RAO UES, Lukoil, Gazprom, and others. Dmitry Ruvinsky Partner, Tax • Dmitry joined Grant Thornton Russia in 2004. Dmitry graduated from the Moscow Finance Academy. He gained his experience as tax adviser with Big4 and domestic firms. • He specializes in all aspects of the Russian tax legislation, transaction tax services, tax planning, and participates in tax audit and due diligence, and pre-trial settlements of discussions with tax authorities © 2010 Grant Thornton UK LLP. All rights reserved. 24
  • 26. Restructuring solutions in Ukraine | August 2010 Grant Thornton – joint team members Ivan Sapronov Partner, Financial Advisory • Ivan has been a partner in Grant Thornton Russia since 1994. He specializes in merger & acquisition activity including capital raising, deal structuring and transaction advisory services. Prior to joining, Ivan gained his experience with a Big 4 Firm in Germany and as a manager with a number of joint ventures. • Ivan will lead Russian M&A and financial analysis services for stressed corporates and their stakeholders. Andrey Sorochan Director, Financial Advisory • Andrey joined Grant Thornton Russia in 2006 after working in corporate finance advisory and assurance departments with two Big4 firms and as a Finance Manager for two international companies. Andrey started his career at the consulting agency involved in the restructuring of the industrial enterprises. • Andrey holds MBA degree in Corporate Strategy from Maastricht School of Management and is a US Certified Public Accountant. • Andrey will act as local project manager on restructuring assignments. © 2010 Grant Thornton UK LLP. All rights reserved. 25
  • 27. Restructuring solutions in Ukraine | August 2010 Grant Thornton – joint team members Andy Hosking Partner, Grant Thornton UK • Andy joined Grant Thornton in 2002, having joined as a partner from another major accounting firm. • Andy specialises in providing a full range of advice to lenders and directors of companies with a particular emphasis on the financial and insurance sector. He is currently acting as liquidator on two shipping groups, Projector SA and Pioneer Freight Futures Company Limited. Adrian Richards Partner, Grant Thornton UK • Adrian has been a partner in Grant Thornton's Recovery & Reorganisation department since 1998. Although he has experience of multi-bank international workouts, his key focus is to assist corporates to improve financial and operational performance. • Adrian has been instrumental in developing the UK firm's debtor advisory and turnaround function which has an increasing international reach.. Steven Akers Partner, Grant Thornton UK • Before joining Grant Thornton in 2002, Steve had been a Reorganisation Services partner in a Big 4 firm for 13 years. • Steve has led many assignments investigating the viability of large corporate entities. Where the future viability of the corporate entity could not be achieved by way of a restructuring or refinancing, he has taken appointments. This includes offshore insolvency experience relating to Russia and the Ukraine. © 2010 Grant Thornton UK LLP. All rights reserved. 26
  • 28. Restructuring solutions in Ukraine | August 2010 Grant Thornton – joint team members David Gardner Director, Grant Thornton UK • David specialises in advising boards on the development of their change strategy, conducting operational and benefits case reviews and developing and implementing change programmes. David has worked on more than 30 major separation, integration, private equity, business evaluation and performance improvement engagements. Oliver Colling Director, Grant Thornton UK • Oliver is the practice leader of Grant Thornton UK's Financial Management and Effectiveness team. He has over 20 years' advisory and line roles in both professional services and industry. He has worked with local teams in Europe and other regions, supporting CFOs to improve their finance and back office functions. Kathryn Hiddleston Partner, Grant Thornton UK • Kathryn is the head of the tax and pensions advisers for the Recovery and Reorganisation department within Grant Thornton UK LLP. In this role she helps groups reorganise themselves more tax efficiently. Kathryn has established a network of tax specialists across the Grant Thornton International network to advise swiftly on group cross border tax considerations. © 2010 Grant Thornton UK LLP. All rights reserved. 27
  • 29. Restructuring solutions in Ukraine | August 2010 Other CIS partners and staff Gagik Gyulbudaghyan Managing Partner, Grant Thornton Amyot, Armenia • Gagik helps clients to develop business plans and feasibility studies, and with due diligence and fund raising assignments for different sectors of economy. He also manages consulting projects for the Government of Armenia, USAID, the EU and other International Financial Institutions across the region. He is responsible for restructuring projects in both Armenia and Georgia. Nelson Petrosyan Senior Manager, Grant Thornton Georgia • Nelson is the country manager for the business operations of Grant Thornton Georgia, which draws upon the Armenian firm for additional resources. Nelson leads assurance services such as corporate and donor audits, as well as management consultancy and transaction advisory projects across the country. Nelson holds a Masters Degree in Public Policy and Administration from the University of Massachusetts and degree in economics from the Yerevan State University. Larisa Masmanyan Manager, Grant Thornton Armenia • Larisa has worked on corporate finance, M&A, business and asset valuations, marketing and financial analysis assignments across the CIS. She spent much of 2009 on secondment to the UK firm to support a wide variety of business valuation and forensic projects. • Larissa speaks fluent Russian and English. © 2010 Grant Thornton UK LLP. All rights reserved. 28
  • 30. Restructuring solutions in Ukraine | August 2010 Offshore jurisdiction partners and staff Stavros Iannou Partner, Grant Thornton Cyprus • Stavros is a SAS partner in Grant Thornton Cyprus. He advises clients on financial due diligence for acquisitions and fundraising, flotations and public company transactions. Stavros will coordinate any local legal and tax inputs required as part of a restructuring or insolvency project including Cyprus listed entities. He is a member of the Institute of Chartered Accountants in England and Wales. Mark McDonald Director, Grant Thornton UK, British Virgin Islands • Mark qualified as both a solicitor and accountant in New Zealand before moving to the Cayman Islands in 2004. He then spent a year based in London before moving to the British Virgin Islands in 2006. He has been working on various aspects of the Basis Yield Alpha failed hedge fund case. Many of his regional assignments have been both voluntary and compulsory liquidations of large international groups. Jean-Michel Hamelle Partner, Grant Thornton Luxembourg • Jean-Michel specialises in international direct and indirect tax services to companies in the financial and industrial sectors. He has a wide experience of cross-border deals, including M&A, holding and interim holding company liquidations and restructuring projects. He has a Master's degree in Business Law to complement his Chartered Public Accountant qualification. © 2010 Grant Thornton UK LLP. All rights reserved. 29
  • 31. Restructuring solutions in Ukraine | August 2010 Contacts Vitaliy Kazakov Partner, Corporate Finance, Grant Thornton Ukraine T: +380 44 583 0363 E: vkazakov@gtrukraine.com Andrey Sorochan Director, Corporate Finance, Grant Thornton Russia T: +7 495 258 9990 E: isapronov@gtrus.com Mark Byers Partner, Recovery & Reorganisation T: +44 20 7728 2522 E: mark.byers@gtuk.com Nigel Davies Associate Director, Recovery & Reorganisation - Coordination T: +7 495 258 9990 T: +44 20 7728 3126 E: nigel.davies@gtuk.com © 2010 Grant Thornton UK LLP. All rights reserved. 30
  • 32. Restructuring solutions in Ukraine | August 2010 Introducing Grant Thornton Grant Thornton Ukraine Global co-operation Grant Thornton Ukraine has 5 partners and over Grant Thornton International pro-actively supports the 65 staff. The firm provides a wide range of services origination and delivery of cross-border projects. For including audit, business advisory and taxation services, Recovery & Reorganisation services, Grant Thornton specialist corporate finance, and recovery and Ukraine has a special arrangement with the UK member restructuring. firm, who have one of the largest and most experienced restructuring teams in Europe. This enables us to We have been the member firm of Grant Thornton complement our own skills with its functional and International in Ukraine since 1993. industry specialists when necessary. Grant Thornton International Grant Thornton UK LLP Member and correspondent firms of Grant Thornton Grant Thornton UK LLP is a leading financial and International are independently owned and managed. business adviser . It works with a wide spectrum of The Grant Thornton International worldwide network businesses and their financial stakeholders, ranging from has revenues in excess of $4.0 billion and representation mid-sized and large owner-managed businesses to in over 100 countries across 600 locations employing quoted PLCs competing in global markets. over 30,000 people. Grant Thornton UK LLP has 34 offices with Member firms have access to the knowledge and circa 300 partners, over 4,000 staff and revenues in experiences of individual market places, as well as excess of £340 million. 52 partners and directors and technologies, methodologies and specialist resources. 400 staff specialise in Recovery and Reorganisation. © 2010 Grant Thornton UK LLP. All rights reserved. 31
  • 33. Restructuring solutions in Ukraine | August 2010 Recovery & Reorganisation Member and correspondent firms in 57 countries and territories are authorised by Grant Thornton International to undertake Recovery & Reorganisation assignments Europe, Middle East and Africa (34) Armenia Ireland Poland Belgium Isle of Man Portugal Botswana Israel Russia* Channel Islands Italy Serbia Croatia* Kenya South Africa Egypt Luxembourg Spain Finland Macedonia Sweden France Malta Ukraine* Georgia Mauritius UAE Germany Netherlands UK Gibraltar Oman Zambia Greece* Asia Pacific (14) Americas (9) Australia Malaysia Argentina Mainland China New Zealand Bahamas Hong Kong Pakistan Bermuda India Philippines British Virgin Islands Indonesia Singapore Canada Japan Thailand Cayman Islands Korea Vietnam Dominican Republic Mexico United States * joint teams with Grant Thornton UK LLP © 2010 Grant Thornton UK LLP. All rights reserved. 32
  • 34. Restructuring solutions in Ukraine | August 2010 Selected Grant Thornton Ukraine transaction advisory services credentials Case Sector Comments Leasing of automobiles Provided tax and financial due diligence Invest Management Real estate Provided financial due diligence Corporation LLC Medintrans LLC Real estate Provided tax and financial due diligence Real estate, development and Provided financial analysis construction Provided tax due diligence Food industry © 2010 Grant Thornton UK LLP. All rights reserved. 33
  • 35. Restructuring solutions in Ukraine | August 2010 Selected Grant Thornton Ukraine transaction advisory services credentials Case Sector Comments Retail Provided tax review, IFRS audit Papernyanskii Karier Digging of quartzy glass sand Provided tax, legal and financial due diligence Steklyannyh Peskov LLC Oil and gas Provided tax, legal due diligence Provided tax, legal due diligence Oil and gas © 2010 Grant Thornton UK LLP. All rights reserved. 34
  • 36. Restructuring solutions in Ukraine | August 2010 Banking sector - assurance clients Bank Petrocommerz Marfin Laiki Bank Industrial Bank TAS Business Bank UkrEximBank Ukraine Delta Bank Period: 2006-2007 Period: 2004-2009 Period: 2005-2007 Period: 2005-2007 Period: 2005-2010 Period: 2006-2007 Bank of Investments Ipobank Bank Uneks and Savings Ukrgasbank Transbank Bank Metallurg Period: 2006-2010 [Period: 2005-2007 Period: 2006-2010 Period: 2005-2010 Period: 2008-2009 Period: 2008-2009 © 2010 Grant Thornton UK LLP. All rights reserved. 35
  • 37. Restructuring solutions in Ukraine | August 2010 Insurance and leasing - assurance clients IC «Ukrainian Insurance Group» IC «Kraina» Bogdan Leasing CJSC VAB - Insurance Euroleasing LLC Insurance company Insurance company Leasing company Insurance company Insurance company Period: 2005-2010 Period: 2005-2010 Period: 2009-2010 Period: 2008 Period: 2008 © 2010 Grant Thornton UK LLP. All rights reserved. 36
  • 38. Restructuring solutions in Ukraine | August 2010 Oil and gas - assurance clients JV Shelton Canada and Karpatskii Petroleum Kashtan Petroleum LLLC Chernomorneftegas LLC Ukrkarpatoil Corporation KrymTehasnafta (HHOL) Subsidiary of Subsidiary of Subsidiary of Cardinal Resources plc Cardinal Resources plc Epicenergy Period: 2003-2010 Period: 2003-2010 Period: 2005-2007 Period: 2005-2007 Period: 2005-2007 Transeuro Energy Corp. - Ammonit LLC Indusmin Energy Pivdenspecbud Subsidiary of Subsidiary of Subsidiary of Transneuro Energy Transneuro Energy Transneuro Energy Period: 2005-2008 Period: 2006-2007 Period: 2008-2009 © 2010 Grant Thornton UK LLP. All rights reserved. 37
  • 39. Restructuring solutions in Ukraine | August 2010 Agriculture - assurance clients Nasha Oliya LLC Desna Grain LLC Oil seeds, farming Supplier of seeds, fertilizers Period: 2008-2010 Period: 2006-2007 © 2010 Grant Thornton UK LLP. All rights reserved. 38
  • 40. Restructuring solutions in Ukraine | August 2010 Retail and services - assurance clients WA Developments Niko Group Unitrade Group LLC City Com International Ukraine Euroset Winner Group Automobile retail. Electronics retailer Electronics retailer Clothes retailer. TM Next Electronics retailer Automobile retail. Dealer of Dealer of Mitsubishi Motors and Mothercare dealer Ford, Porsche and Jaguar Period: 2004-2010 Period: 2006-2008 Period: 2007-2008 Period: 2008-2009 Period: 2008 Period: 2008-2010 Carlo Pazolini Trading Chipita Ukraine Sbyt LLC Bic Ukraine LLC Lindstrom Ukraine LLC Hilti Ukraine LLC Shoes retailer Food retailer Stationery retailer Leasing services for Equipment retailer special clothes and carpets Period: 2008 [Period: 2008-2010 Period: 2009-2010 Period: 2009-2010 Period: 2010 © 2010 Grant Thornton UK LLP. All rights reserved. 39
  • 41. Restructuring solutions in Ukraine | August 2010 Manufacturing - assurance clients OJSC Kremenchuk steelmaking plant JSC Kaolin Intercabel LLC Smoby Ukraine LLC FCA Ukraine Subsidiary of Fareva Steel-smelting plant Mining company Cable manufacturer Toys manufacturer Cosmetics manufacturer Period: 2008-2009 Period: 2008 Period: 2008-2009 Period: 2008 Period: 2008-2009 Discovery drilling equipment LLC Barlinek Ukraine LLC Cersanit Ukraine LLC Zeus Ceramica LLC Drilling equipment Parquet manufacturer Bathroom fixtures Luxury ceramics manufacturer manufacturer manufacturer Period: 2008-2010 Period: 2009-2010 Period: 2009-2010 Period: 2008-2010 © 2010 Grant Thornton UK LLP. All rights reserved. 40
  • 42. Restructuring solutions in Ukraine | August 2010 Municipal entities and infrastructure - assurance clients Kharkov sewage Kharkov heating system disposal plant Lvovelektrotrans Contour Global Ukrinterenergo Kyivpastrans Heating services Municipal transportation Heating services Electricity Municipal transportation Period: 2006-2007 Period: 2006-2007 Period: 2010 Period: 2008-2010 Period: 2008-2010 Period: 2008-2009 Kyivmetropoliten CJSC UkrEsco Zhitomyrvodokanal ME Ukrzaliznutsya Lvovteplokomunenergo Lvovvodokanal Kyiv underground Energy Water supply Railway Heating services Water supply Period: 2009-2010 Period: 2008-2010 Period: 2008 Period: 2008 Period: 2009 Period: 2006-2007 © 2010 Grant Thornton UK LLP. All rights reserved. 41
  • 43. Restructuring solutions in Ukraine | August 2010 Real estate and construction - assurance clients JSC Comfortbud IV Comfort Invest JSC Comfort Service SvitLand Ukraine Construction Construction Construction Construction and development and development and development and development Period: 2008-2010 Period: 2008-2010 Period: 2008-2010 Period: 2009 Ukrainian Investment Leks LLC Engineering Company ThyssenKru pp Gmbh Project Master Manufacturing Construction Manufacturing Engineering of doors, windows and development of elevators Period: 2008-2009 Period: 2009 Period: 2009-2010 Period: 2009-2010 © 2010 Grant Thornton UK LLP. All rights reserved. 42
  • 44. Restructuring solutions in Ukraine | August 2010 Medicine and pharmaceuticals - assurance clients Borshagovskii Boris LLC ISIDA LLC Khimpahrmzavod OJSC Ranbaxy Bayer SharingPharma AG Medical clinic Medical clinic Pharmaceutical plant Production Production of pharmaceuticals of pharmaceuticals Period: 2008-2009 Period: 2009-2010 Period: 2009-2010 Period: 2008 Period: 2005-2009 © 2010 Grant Thornton UK LLP. All rights reserved. 43
  • 45. Restructuring solutions in Ukraine | August 2010 Selected Russian valuation credentials MAKS SUKHOI ROSOBORONEXPORT MIG TUPOLEV KAPO Gorbunov Russian state agency for Aviation and Space salon Russia’s major aircraft export and import of military Aircraft corporation Aircraft Design Bureau Aircraft construction complex corporation products, technologies and services Grant Thornton provided Grant Thornton provided Grant Thornton provided Grant Thornton provided Grant Thornton provided Grant Thornton provided valuation services valuation services valuation services valuation services valuation services valuation services © 2010 Grant Thornton UK LLP. All rights reserved. 44
  • 46. Restructuring solutions in Ukraine | August 2010 Selected Russian valuation credentials The Likhachev Plant (AMO ZIL) GAZ Group AEROFLOT DENSO AVIA LUKOIL Russian truck and heavy Automobile and machine Russia’s largest air carrier Russian internal air carrier equipment manufacturer building producer Grant Thornton provided Grant Thornton provided Grant Thornton provided Grant Thornton provided valuation services valuation services valuation services valuation services Sheremetyevo Russian Railway International Airport Rostekhnologii Technomash State Corporation to Technology Engineering Russian railways Second largest airport in Facilitate Development, Research and Production Russia Production, and Export of Association, producer of Hi-Tech Industrial Products space-rocket equipment Grant Thornton provided Grant Thornton provided Grant Thornton provided Grant Thornton provided valuation services valuation services valuation services valuation services © 2010 Grant Thornton UK LLP. All rights reserved. 45
  • 47. Restructuring solutions in Ukraine | August 2010 Selected Russian valuation credentials Capital Group Group of Companies PIK Quinn Group PULKOVO Airport Sankt-Petersburg airport Real estate developer Real estate developer Real estate developer Grant Thornton provided Grant Thornton provided Grant Thornton provided due Grant Thornton provided valuation services valuation services diligence and legal services valuation services AFI Development Inteko KROST Concern New Square Real estate developer Real estate developer Real estate developer Real estate developer Grant Thornton provided risk Grant Thornton provided Grant Thornton provided Grant Thornton provided tax management services valuation services valuation services advisory services © 2010 Grant Thornton UK LLP. All rights reserved. 46
  • 48. Restructuring solutions in Ukraine | August 2010 Selected Russian valuation credentials FAREVA RECS RUSNANO home care, industrial, food, Renewable Energy The Russian Corporation of cosmetics and Certificate System Nanotechnologies pharmaceuticals Grant Thornton provided Grant Thornton provided Grant Thornton provided transaction advisory services valuation services valuation services OPTRON ELEKTRON ROSEL Energy-saving technologies National Research Institute Distributor of the chemical and equipment sources of electric power Grant Thornton provided Grant Thornton provided Grant Thornton provided valuation services valuation services valuation services © 2010 Grant Thornton UK LLP. All rights reserved. 47
  • 49. Restructuring solutions in Ukraine | August 2010 Selected Russian valuation credentials Alfa Bank Raiffeisen Bank BSGV Sberbank of Russia VneshtorgBank Russian financial institution International financial International financial Russian financial institution Russian financial institution institution institution Grant Thornton provided Grant Thornton provided Grant Thornton provided Grant Thornton provided Grant Thornton provided valuation services valuation services valuation services valuation services valuation services Uralsib Finance Standard Bank GazpromBank Bank of Moscow ROSSGOSSTRAKH Corporation International financial Russian financial institution Russian municipal financial Russian insurance company Russian financial institution institution institution Grant Thornton provided valuation Grant Thornton provided valuation Grant Thornton provided Grant Thornton provided Grant Thornton provided and transaction advisory services and transaction advisory services valuation services valuation services valuation services © 2010 Grant Thornton UK LLP. All rights reserved. 48
  • 50. Restructuring solutions in Ukraine | August 2010 Selected Russian valuation credentials Nutritek Cherkizovo Russkoye moloko Sun InBev Baby food manufacturer Meat products manufacturer Agro-industrial holding Brewery specializing in the dairy products Grant Thornton provided valuation Grant Thornton provided Grant Thornton provided Grant Thornton provided and advisory services valuation services valuation services valuation services © 2010 Grant Thornton UK LLP. All rights reserved. 49
  • 51. Restructuring solutions in Ukraine | August 2010 Selected Russian valuation credentials Belkamneft - Gazprom Lukoil Mostransgaz TransNeft TomskNeft Zolotorevskoye oil field World’s largest gas company One of the world’s largest oil Russian gas company Oil extraction Transportation of petroleum A subsidiary of Rosneft & gas company Grant Thornton provided Grant Thornton provided Grant Thornton provided Grant Thornton provided Grant Thornton provided Grant Thornton provided valuation services valuation services valuation services valuation services valuation services valuation services Renova Alrosa Mechel MosGas Northgas Leading Russian private business group with the focus Exploration, mining and Russian steel and mining The largest gas enterprise in distribution of diamonds company Moscow region Exploration & gas production on oil, and mining Grant Thornton provided Grant Thornton provided Grant Thornton provided Grant Thornton provided Grant Thornton provided valuation services valuation services valuation services valuation services valuation services © 2010 Grant Thornton UK LLP. All rights reserved. 50
  • 52. Restructuring solutions in Ukraine | August 2010 Selected Russian valuation credentials Auto Security services MEGA provider AerRianta International TechnoSila Grant Thornton provided transaction advisory services Shopping malls Retail of electronics Duty free retail chain operating in the airports Grant Thornton provided Grant Thornton provided Grant Thornton provided valuation services valuation and advisory services valuation services MVideo AvtoMir Mothercare Retail of electronics Retail of automobiles Grant Thornton provided Grant Thornton provided valuation services valuation services © 2010 Grant Thornton UK LLP. All rights reserved. 51
  • 53. © 2009 Grant Thornton UK LLP. All rights reserved. ‘Grant Thornton’ means Grant Thornton UK LLP, a limited liability partnership. Grant Thornton UK LLP is a member firm within Grant Thornton International Ltd (‘Grant Thornton International’). Grant Thornton International and the member firms are not a worldwide partnership. Services are delivered by the member firms independently. This proposal is made by Grant Thornton UK LLP and is in all respects subject to the negotiation, agreement and signing of a specific contract/letter of engagement. The client names quoted within this proposal are disclosed on a confidential basis. All information in this proposal is released strictly for the purpose of this process and must not be disclosed to any other parties without express consent from Grant Thornton UK LLP. www.grant-thornton.co.uk