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PRESS CONFERENCE S OFIA, T UESDAY 24 TH M ARCH 2015 EUROPEAN UNION INVESTOR TO ASSUME 900 MLN EUR OF DEBTS IN BULGARIA 1 Press contact: M. Pascal Irastorza.

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Presentation on theme: "PRESS CONFERENCE S OFIA, T UESDAY 24 TH M ARCH 2015 EUROPEAN UNION INVESTOR TO ASSUME 900 MLN EUR OF DEBTS IN BULGARIA 1 Press contact: M. Pascal Irastorza."— Presentation transcript:

1 PRESS CONFERENCE S OFIA, T UESDAY 24 TH M ARCH 2015 EUROPEAN UNION INVESTOR TO ASSUME 900 MLN EUR OF DEBTS IN BULGARIA 1 Press contact: M. Pascal Irastorza Tel: +359 8 76 17 74 44 E-mail: press.contact@lic33.compress.contact@lic33.com

2 Why Did We Invest in Bulgaria? LIC33, led by Pierre Louvrier, invests in special situations, turnarounds and restructurings in emerging markets; We became interested in the Balkan EU countries because they combine the opportunity set of emerging markets with the solid legal and regulatory environment of European Union membership After months of uncertainty, we bring stability – which is what people crave We believe in Bulgaria, in its people and the fundamentals of the country. We believe in our employees. We are here for the long run Working together will require trust, transparency and mutual respect Our role is to lead the way and to honor all existing commitments, We want to give people the means to realize themselves and to succeed together. 2 Press contact: M. Pascal Irastorza Tel: +359 8 76 17 74 44 E-mail: press.contact@lic33.compress.contact@lic33.com

3 Transaction Summary LIC33 group of companies has entered into a transaction to acquire some of the non- banking assets of the Seller; The primary company is Vivacom, the leading telecom company in Bulgaria; The consideration consists of assuming ~900 mln EUR of debts across the structure; The transaction still requires the relevant regulatory approvals; Our approach: Acquisition transparency –provide a transparent legal restructuring; Honor and refinance of obligations that are due; Reinvest profits to fuel growth. 3 Press contact: M. Pascal Irastorza Tel: +359 8 76 17 74 44 E-mail: press.contact@lic33.compress.contact@lic33.com

4 What Are The Holdings ? LIC33 has acquired the Seller’s interests in the following areas: Vivacom NURTS Dunarit Avionams Garb First Digital Total EBITDA across these companies is estimated at EUR 180-200 million, with net debt approximating EUR 900 million 4 Press contact: M. Pascal Irastorza Tel: +359 8 76 17 74 44 E-mail: press.contact@lic33.compress.contact@lic33.com

5 Press contact: M. Pascal Irastorza Tel: +359 8 76 17 74 44 E-mail: press.contact@lic33.compress.contact@lic33.com 5

6 Press contact: M. Pascal Irastorza Tel: +359 8 76 17 74 44 E-mail: press.contact@lic33.compress.contact@lic33.com 6 Vivacom (operating entity Bulgarian Telecommunications Company EAD) is a descendent of the fixed line incumbent of Bulgaria, expanded through merger with mobile operator. Owns more than 90% of all fixed telecom infrastructure in Bulgaria and employs over 3.5 thousand people Two main lines of business: Mobile. Vivacom holds 22-25% market share and competes with Mobitel (sub of Telekom Austria) and Telenor (sub of Norway’s Telenor Group). Appr. 2.8 million subscribers, with blended ARPU approaching EUR 5.7 per month. Operates the most extensive 3G network in the country. Currently increasing market share Fixed line services, including: Fixed voice. 84% market share, 1.2 million subscribers. Blended ARPU of EUR 5.9 per month Fixed data (internet broadband through ADSL and FTTx). 0.35 million subscribers with ARPU of EUR 5.5 per month Other fixed businesses, incl DTH pay-TV which is at the initial development stage Current shareholder structure: 44% directly committed for acquisition by LIC33 (regulatory approvals pending); 33% owned by Crusher Ltd.; 23% held by various minority investors. LIC33 will propose to acquire the shares held by other shareholders of Vivacom by the end of 2015.

7 Press contact: M. Pascal Irastorza Tel: +359 8 76 17 74 44 E-mail: press.contact@lic33.compress.contact@lic33.com NURTS is the major provider of TV and radio broadcasting services, in operation since 2004. Owns and operates 700 infrastructure towers around Bulgaria providing complete solutions for signal transmission and radio and TV broadcasting. Covers 97% of Bulgarian population with digital terrestrial television. Over 50% of revenue comes from TV broadcasting; rest from radio and mobile. The company has 300 employees NURTS provides services to: Bulgarian National Radio Bulgarian National Television Various TV channels (TV7, BTV, Nova TV, Diema Family) All three mobile operators (Vivacom, Mobiltel, Telenor) NURTS is undergoing separation of its loss making satellite transmission unit, which has a positive effect on the Y2014 net profit performance (one off gains recorded as a result of separation of this non-continuing business unit). 100% of NURTS mother companies are committed to be acquired by LIC33; In September 2014, Vivacom entered into a transaction to acquire 100% of NURTS from its existing shareholders. Settlements have been completed, however the deal has not completed with antimonopoly authorisation and other local regulatory authorisations pending; LIC33 will assist where it can in finalizing the transaction with Vivacom. 7

8 Press contact: M. Pascal Irastorza Tel: +359 8 76 17 74 44 E-mail: press.contact@lic33.compress.contact@lic33.com Dunarit is a manufacturing facility for military munitions and explosives, with over 100 years history. Currently Dunarit manufactures artillery and aerial ammunitions, antitank and antipersonnel mines, detonating cords and a range of machinery for civil use. The company and its products are ISO 9001 certified and hold the necessary NATO standard certificates.. The company employs over 700 people at its factory in the town of Ruse, Bulgaria. Key clients include the Ministry of Defence of Bulgaria and a range of Bulgarian and US military and other corporations. Avionams is a military jet and helicopter repair and maintenance provider, certified to fit NATO standards and specialising in maintenance of ex-Soviet aircraft owned and operated by NATO member countries The company has been certified by NATO standards. Avionams has three core facilities, all located near the town of Plovdiv in Bulgaria: Aircraft overhaul facility, located at Graf Ignatievo military airbase, with direct access to 3000 m long runways; Aircraft engine and gearbox overhaul facility in Plovdiv; Bench testing facility at Krumovo civil airport 91% mother company in both Dunarit and Avionams is acquired by LIC33,subject to pending regulatory approvals; the remaining 9% in each business is owned by Corporate Commercial Bank. 8

9 Garb Audience Research is the leading provider of TV audience research services and data in Bulgaria. Garb performs audience research and measurement using a nation wide representative peoplemetric TV panel, compliant with ESOMAR international market requirements and operated following the guidelines of European Broadcasting Union. Garb provides fully a representative view on TV preferences of Bulgarian population through half-annual waves of audience research campaigns among registered citizens of Bulgaria, who hold at least one TV set and install the Garb TV panels. The company also provides radio metrics services. The company analyses audience response to broadcasting and advertisement of 35 TV channels and 18 radio stations in Bulgaria. First Digital is the digital terrestrial television (DTT) multiplex operator for Bulgarian National Television and a number of other TV channels. DTT technology provides a better quality, higher capacity and lower cost broadcast of a TV signal when compared to analog television Since 2013, the company has been operating a DVB-T network The network covers almost the entire territory of Bulgaria and provides DTT services to 7.1 million Bulgarians Press contact: M. Pascal Irastorza Tel: +359 8 76 17 74 44 E-mail: press.contact@lic33.compress.contact@lic33.com 9

10 Our Approach – The 4 Rs Resolve  the ownership situation and any immediate issues Restructure  simplify the legal structures Refinance  repay debts and work with lenders to determine the best capital structure Reinvest  invest profits to fuel growth 10 Press contact: M. Pascal Irastorza Tel: +359 8 76 17 74 44 E-mail: press.contact@lic33.compress.contact@lic33.com

11 Our Resolution Our transaction has resolved the issue around the companies’ ownership and is bringing stability to the whole shareholding structure; Companies will be able to plan and invest for the long term; We are being open with the market about our intention to acquire various ownership stakes; We are preparing the relevant regulatory applications 11 Press contact: M. Pascal Irastorza Tel: +359 8 76 17 74 44 E-mail: press.contact@lic33.compress.contact@lic33.com

12 Restructure The current legal structure needs reworking to be more efficient and to unwind the various CCB debts embedded in it We will pursue a legal and financial reorganization of the various holding companies to get rid of inefficient structures This goes hand-in-hand with repaying the debts owed to CCB The criteria for the restructuring is to bring total transparency to the situation. 12 Press contact: M. Pascal Irastorza Tel: +359 8 76 17 74 44 E-mail: press.contact@lic33.compress.contact@lic33.com

13 Refinance We are in discussions to refinance the equity bridge loan due in May, at the level above Vivacom; We intend to honor proven, existing CCB debts by re-structuring, servicing and refinancing them; We view ourselves as partners of the Bulgarian government in repaying debts owed to CCB We will examine ways to optimize the capital structures of the various operating companies 13 Press contact: M. Pascal Irastorza Tel: +359 8 76 17 74 44 E-mail: press.contact@lic33.compress.contact@lic33.com

14 Reinvest New ownership will unlock the capital markets, enable investment We will reinvest profits to fuel long-term growth We want to work with the existing management teams, where possible, to build on past successes We want growth, not cost-cutting; we seek to retain existing workforce of over 4,500 employees We will consider accretive M&A and business development, both in Bulgaria and abroad 14 Press contact: M. Pascal Irastorza Tel: +359 8 76 17 74 44 E-mail: press.contact@lic33.compress.contact@lic33.com

15 Typical Questions 15 Press contact: M. Pascal Irastorza Tel: +359 8 76 17 74 44 E-mail: press.contact@lic33.compress.contact@lic33.com

16 Is this an arms-length transaction? LIC33 is a special purpose vehicle formed for this acquisition. The financial backers are LIC33’s Chairman and Managing Partners. There are no outside investors, no repurchase agreements, no other investors then LIC33’s Chairman and Managing Partners. The Sole UBO for LIC33 is Mr. Pierre Louvrier. The Seller has definitively sold his interest in the companies and is not participating in the situation. We do share a common desire to see the debts repaid and for workers to remain employed at these entities. 16 Press contact: M. Pascal Irastorza Tel: +359 8 76 17 74 44 E-mail: press.contact@lic33.compress.contact@lic33.com

17 Who is working with LIC33? LIC33 has no outside investors or partners, so it can take a long-term view and does not need to redeem investments to any third party. The principals have successfully conducted projects with large financial institutions such as BNPP, Credit Suisse, Unicredit, SocGen, Citi Group, Morgan Stanley, and others. It is an independent participant in the Bulgarian markets and is not affiliated with any local or outside group. The principals share work experience in Russia, which is an advantage because some of the issues to be solved are similar to business problems regularly met there. 17 Press contact: M. Pascal Irastorza Tel: +359 8 76 17 74 44 E-mail: press.contact@lic33.compress.contact@lic33.com

18 What should investors think? They should welcome the arrival of a new, stable owner committed to cleaning up the situation and creating value. They should know that we will act first in the interests of the company to repay and refinance all existing obligations as they come due, including to CCB. We will use all just and legal means to protect investors and employees; They should have a dialogue with us about how to create value for all investors and stakeholders. 18 Press contact: M. Pascal Irastorza Tel: +359 8 76 17 74 44 E-mail: press.contact@lic33.compress.contact@lic33.com

19 What is LIC33’s relationship with the Bulgarian authorities ? We are newcomers. We share many common interests and goals with the government: To see employees of the various companies under LIC33 keep their jobs and enjoy the stability and comfort that come with having a long-term investor as an owner. To see a full and timely repayment of the CCB-related debts. The promotion of foreign investment from across the EU and a welcoming investment climate in Bulgaria. To see property rights respected and EU legal standards upheld. 19 Press contact: M. Pascal Irastorza Tel: +359 8 76 17 74 44 E-mail: press.contact@lic33.compress.contact@lic33.com

20 Who Is Mr. Pierre Louvrier? Pierre is a Franco-Belgian entrepreneur and investor. He began his career in Western Europe, founding an IT company and selling it at the age of 26. He then began to invest in restructurings, turnarounds and workouts, using his management experience to improve operations. His investment expertise lies in special situations, refinancing and turnarounds. He increased his investments exposure to Eastern Europe since seven years, gaining deep experience of special situations specific to these geographies. He invests his own capital and is independent. 20 Press contact: M. Pascal Irastorza Tel: +359 8 76 17 74 44 E-mail: press.contact@lic33.compress.contact@lic33.com

21 The Team General Bertrand Cavallier, Senior Advisor After a 36 year career in the Gendarmerie nationale de France, Bertrand Cavallier retired with the rank of Major General in 2011. Certified from the Ecole de Guerre (College for Warfare), and a graduate of the Ecole Spéciale Militaire de Saint Cyr, (Saint Cyr Special Military Academy), Bertrand Cavallier served, notably, as the Commander of the Centre National d'Entrainement des Forces de Gendarmerie de France, (National Training Center for Gendarmerie Forces) at St. Astier, and as region Commander. He is known for his special expertise in the training of European interior security forces and has conducted numerous international missions in the Balkans, Romania, Ukraine and Russia. As Director in a major French security company (2011-2014), his role was to advise businesses with the aim of preventing and managing the risks associated with their international development. He had the opportunity to establish and strengthen his networks in the areas named above, but also in Africa, Iran, Middle-East and Europe. 21 Press contact: M. Pascal Irastorza Tel: +359 8 76 17 74 44 E-mail: press.contact@lic33.compress.contact@lic33.com

22 The Team Jean Joseph Jacober, Senior Independent Advisor Mr. Jacober has an international track record of complex turnarounds and fast concept implementations within various industries. As part of his career Jean J. Jacober was responsible for the luxury investments of Investcorp International Ltd., London. He was also the Chief Executive Officer of the Breguet Group. He not only turned around this group but achieved substantial worldwide growth. This enabled Investcorp to successfully restructure the investment to the Swatch Group Ltd. As Chief Operating Officer of Patek Philippe, Jean J. Jacober managed to significantly strengthen the company's global market share and financial results. Prior to this he was Sales and Marketing Manager of RJR Nabisco and Brand Manager for Proctor & Gamble. Mr Jacober holds a business diploma from the Ecole des Cadres Lausanne and a Masters degree from Fordham University. Additionally, he gained an Executive Finance MBA from Stanford. 22 Press contact: M. Pascal Irastorza Tel: +359 8 76 17 74 44 E-mail: press.contact@lic33.compress.contact@lic33.com

23 The Team Bruce Bower, Managing Director Bruce is a London-based investor in emerging markets. From September 2010- December 2014, he was a Partner, Head of Equity and Portfolio Manager at Verno, based in Moscow. Prior to that, he was at Kazimir Partners in London and Moscow. At both places, the portfolios that he has we working with generated returns at the top of their peer group. Cumulatively, Bruce has spent 8 years living and working in emerging markets. He holds a B.A. (Honors) in Economics and History from the University of Chicago and a M.Sc. in Political Economy from the London School of Economics. He holds both US and UK citizenship. He is fluent in English and Russian. 23 Press contact: M. Pascal Irastorza Tel: +359 8 76 17 74 44 E-mail: press.contact@lic33.compress.contact@lic33.com

24 The Team Anatoly Kairo, Managing Director Anatoly is an investment specialist with focus on retail, logistics, telecoms and financial services in Russia and the CIS. In 2007-2014 he acted as a business development director and then finance director for Rolf, the largest automotive group in Russia, with annual turnover of over US$ 5 billion and 6 thousand employees. Anatoly was running a number of business acquisitions / disposals for Rolf in Russia and abroad, as well as spent several years focusing on operations and financial management of Rolf’s 38- dealership car retailing division. Prior to that Anatoly worked in PricewaterhouseCoopers, originally in audit and later in transaction support, overseeing a number of large transactions in banking, telecoms, retail and other sectors in Russia, Ukraine, Georgia, Central Asia and the Balkans. Anatoly is a Fellow Chartered Certified Accountant and holds a master’s in accounting and audit from National Academy of Management, Kiev. He is fluent in English, Russian and Ukrainian. 24 Press contact: M. Pascal Irastorza Tel: +359 8 76 17 74 44 E-mail: press.contact@lic33.compress.contact@lic33.com

25 Our Vision: LIC33 is committed to developing and growing the businesses acquired, in particular: To continue to expand the range and quality of services provided by Vivacom To honor contracts and obligations to the customers of Dunarit and Avionams To take care of the 4,500 people working in various the companies involved in the project To treat fairly and properly the financing banks and other stakeholders To see Bulgaria and its economy benefit from stability and growth at some of its largest companies. 25 Press contact: M. Pascal Irastorza Tel: +359 8 76 17 74 44 E-mail: press.contact@lic33.compress.contact@lic33.com

26 Press Contact: M. Pascal Irastorza Tel: +359 8 76 17 74 44 E-mail: press.contact@lic33.compress.contact@lic33.com Local Press contact: Janev&Janev PR Agency Tel: +359 2 87 00 519 E-mail: tianev@janev-janev.com 26 Press contact: M. Pascal Irastorza Tel: +359 8 76 17 74 44 E-mail: press.contact@lic33.compress.contact@lic33.com


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