Activity Report I/2007

Transcription

1 Activity Report I/2007 We are pleased to present this first issue of PPF Investments ( PPFI ) Activity Report for the period from April 1 st to June 30 th Starting from now you will be informed every quarter about the interim results of PPFI, achievements and goals. PPFI Key Facts PPF Investments is an independent, international private equity group with a focus on transitional economies, such as those found in Central and Eastern Europe and Asia. PPFI s investment strategy is to focus on the fundamentals: sound business & corporate strategy, prudent management, and optimal capital structure. PPF Investments has the right to use the PPF trademark, brand name of the prominent Czech financial group. PPF Investments and PPF Group are two independent groups in terms of assets and business activities. PPFI consists of two groups of companies: Investment Corporations are created for investment purposes based on PPFI investors profile and risk appetite. Currently, we operate PPF Alpha and PPF Beta with total assets under management exceeding USD 800 million. PPFI launched its first Investment Corporation - PPF Alpha - in December The initial subscription period of PPF Alpha finished in December Investors in PPF Alpha have subscribed USD 500 million with a targeted commitment of up to USD 1 billion. The second Investment Corporation - PPF Beta was launched in Summer Investors have already raised USD 248 million of a targeted amount of up to USD 800 million. Advisory Companies include a general advisor PPF Investments (UK) and four sub-advisors operating in the Czech Republic, Russia, Ukraine and Mainland China. Page 1

2 PPFI Portfolio of Investments We are continuously seeking out target investments that can demonstrate professional stability combined with a highly focused management and entrepreneurial culture. PPFI investment approach is based on: an in-depth knowledge and understanding of selected geographies, an ability to offer active financial, managerial and structural support, and access to a broad range of local professional advisers, managers and counsels. PPFI has truly become a very important player in the buy-out market in Central and Eastern Europe, Russia and China. PPF Alpha Portfolio of Investments as of June 30th - Industry allocation 7% 2% 7% 12% 24% 10% 32% 6% Banking, insurance & financial services (10%) Hotels, restaurants, travel & leisure (6%) Media & telecommunications (33%) NPL's (12%) Real estate (7%) Retail trade (2%) Utilities & waste management (7%) Other industries (24%) PPF Alpha portfolio consists of 27 companies or projects. Below you can find a list of selected investments of PPFI portfolio. Target / project Date of Investment Location Activity Shareholding Nanyou December 2005 China Non performing CME December 2005 CEE Television broadcasting Peninsula January 2006 China Non performing Vegacom March 2006 Czech Republic Network system integrator Pražské služby May 2006 Czech Republic Waste collection and incineration AB Credit June 2006 Czech Republic Non performing 8.55% 15.8% Page 2

3 Oriel Resources December 2006 Russia, Kazakhstan Chrome mining and processing Termizo November 2006 Czech Republic Municipal waste incineration 17.65% 91% Ardaf January 2007 Romania Insurance 71% RAI February 2007 Romania Insurance Continental Hotels March 2007 Romania Hotel accommodation Inner Mongolia April 2007 China Non performing 31% Boryspil Land April 2007 Ukraine Real estate 67% Komodor May 2007 Ukraine Real estate 50% UKR CATV May 2007 Ukraine Cable TV s PPF Beta is designed as an investment vehicle for a limited number of large investments primarily in Russia and other former Soviet Union countries. Spring 2007 New Investments This section provides a list of PPFI recent investments. We started Spring 2007 in a very active mode. We have managed to close 4 transactions and we have increased PPFI equity participation in other 2 projects. We have invested almost USD 144 million in respect to these six transactions, which is in line with PPFI strategy of minimum transaction size. Komodor (Ukraine) PPFI and Vicus Limited have joined Cube Capital group in a joint venture to develop a 70,000m 2 Class A logistics facility near Kiev, Ukraine. The facility, West Gate Logistics Park, is located 32km west of Kiev on Zhitomyr Highway near Makariv, and targets logistics, retail and FMCG companies requiring state of the art distribution facilities. The entire facility will be completed and available for occupancy in the fourth quarter of Boryspil (Ukraine) In April 2007 PPFI together with FIM Group invested in acquisition of 52.3 hectare land plot near airport Boryspil (20 km from Kiev). UKR CATV (Ukraine) Over the past quarter, PPFI has completed acquisitions of several local cable televisions and Internet providers in various regions of Ukraine. Further expansion through acquisitions as well as organic growth will be combined with consolidation of acquired entities from legal, financial, operational and marketing point of view. We strongly believe in and would like to Page 3

4 benefit from a growth opportunity in this segment of Ukrainian market over the next 5 years. Oriel Resources (Russia, Kazakhstan) In April 2007, Oriel Resources Plc, the UK owner of a Kazakh chrome mine, issued 48.8 million pounds (USD 95.9 million) of new shares, partly to help fund its Shevchenko nickel project in Ukraine. The company sold 80 million shares at 61 pence a piece. The total issued share capital of the company comprises of 636,211,821 ordinary shares. Eanermoon Ltd., the subsidiary of PPFI, increased its stake in Oriel Resources (chrome and nickel mine and processing company) through private placement mentioned above. It became a holder of approximately 17.7% of shares of the company. In April 2007, Oriel Resources started smelting at its ferrochrome plant in Russia. The Tikhvin smelter can produce the steelmaking ingredient at a rate of 148,000 metric tons a year. Continental Hotels (Romania) In June 2007 PPF Alpha increased share capital in Conti Hotels Investments (CHI) by EUR 10 million. PPFI is thus approximately 31% beneficiary in Continental Hotels. The company achieved EBITDA of EUR 4.3 million in the 1H that is 18% above the result of 1H Inner Mongolia NPL portfolio (China) PPFI has successfully acquired an NPL portfolio in Inner Mongolia Autonomous Region of China through a public auction organized by China Orient Asset Management Corporation. The portfolio with Original Principle Balance (OPB) of over RMB 1.09 billion (approximately USD 140 million) was originally disposed by China Construction Bank in Spring 2007 Exits This section provides a list of recent exits: Romexterra bank (Romania) In the period under review, PPFI sold its interest in Romexterra Bank (Romania) at significant profit. The sale of Romexterra Bank share was completed in May Temposervis (Czech Republic) PPFI sold also its interest in Temposervis to Weeford Group in June The transaction should be closed by the end of September Page 4

5 Spring 2007 Financial Overview All of PPFI investments have performed quite well and we have managed to increase the fair market value of Invested Capital from the end of March till the end of June 2007 by 12%. PPF Alpha Invested Capital (USDm) (USDm) Q1 (2006/07) Q2 (2006/07) Q3 (2006/07) PPFI People PPFI managed to establish four offices in London, Prague, Kiev, Moscow and Beijing. PPFI is fully operational in all these regions and countries. On the personnel front, staff numbers have been increasing with several new hires in Spring Our Russian team has been joined by Alexenader Tsapin, who holds the position of Director. His experience and expertise is appreciated by the Russian team and he already actively participates on a number of projects. Other new hires have joined the teams in Prague and Moscow as well as current PPFI employees relocating to other PPFI offices. All the team members are highly experienced in the area of investment banking, international finance and private equity and during their professional careers have worked or co-operated with a number of blue chip financial institutions. Page 5

6 Outlook PPFI has been actively reviewing a number of prospective new investments. During the Spring 2007 period, 12 potential investments have been brought to an advanced stage of negotiation and it is hoped that one or more of these will come to fruition by the end of Summer 2007 period. We remain optimistic about the future of PPFI. Contacts PPF Investments (UK) Ltd. 33 Chester Street SW1X 7BH London United Kingdom Telephone: +44 (0) Fax: +44 (0) PPF Investments (Russia) Ltd. 8 Pravda Street, Bld Moscow Russia Telephone: Fax: PPF Investment Consulting (Beijing) Ltd. Beijing Lufthansa Center, C 312A 50 Liangmaqiao Rd., Chaoyang District Beijing P.R.C. China Telephone: Fax: PPF Investments (CR) a.s. Na Pankráci 1658/ Prague 4 Czech Republic Telephone: Fax: Page 6

7 PPF Investments (Ukraine) Ltd. 72 (A), Chervonoarmiyska Street (Velyka Vasylkivska), office Kyiv Ukraine Telephone: +38 (0) Fax: +38 (0) DISCLAIMER The information provided in this document has been prepared by PPF Investments (UK) Ltd acting in its capacity as general adviser to the PPF Investments Group Ltd and all its subsidiaries. No information may be reprinted without the express permission of PPF Investments (UK) Ltd. No information contained in this document is intended to solicit any investment or offer to invest by any person and no person listed in these pages is authorised or regulated by any financial services regulator. All pages in this document are provided for information only. PPF Investments (UK) Ltd 2007 Page 7