1. AlternativeFinancingTechniques 1 Nordcap Limited 2009

2. Capital shortage has driven down the CEE M&A market 2 Nordcap Limited 2009

4. Again situation will differ from country to country, the worst hit in EU seem to be Hungary, Ukraine and BalticsNordcap Limited 2009

6. The LBO team which you approach wants to do the deal as much as you do

7. But … they have to convince their RISK DEPARTMENT that the deal is a safe bet

8. Therefore when you approach a bank be sure to:

9. offer a structure which minimizes the risk – try to eliminate some of the risks, for example consider taking debt in local currency (it is a natural hedge)

10. putting more equity on the table is inevitable

11. prepare a financial model with scenario analysis including not only base, best, worst case scenario but also a run down scenario which would show how much the bank would recover if everything goeswrong (Armagedon scenario)

12. Cooperate, cooperate, cooperate – try to answer all the questions the bankers ask no matter what you think about them …Nordcap Limited 2009

15. Typically subordinate debt or equity

16. Great flexibility in financing structure

17. Financier typical have vested interest and involved in Board level of the business

18. Financier shares equity risk of business

19. CONS:

20. Deal size is typically small and thus need to be combined with other forms of financing

21. Financier requires high return & medium term exit strategy

22. Profit participation (equity kicker)

23. Could have dilution effectNordcap Limited 2009

25. In November 2007 Nordcap sold its seed investment DRSA, to an industrial conglomerate listed on the Warsaw Stock Exchange.

26. Nordcap’s professional team consist of business analysts with expertise in information technology, telecoms, marketing and real estate.

27. Nordcap provides both:Venture capital Mezzanine capital 6 www.nordcap.co.uk Nordcap Limited 2009