Page 1 Black Earth Farming Ltd. – a landmark transaction Target price achieved, despite sustained market volatility Offering several times oversubscribed - upsize option exercised on pricing Market capitalisation at IPO of approx. US$911mn (ex-greenshoe) Placed with high quality EM, specialist agricultural, pension and generalist funds Nomura generated total demand in excess of the offer size Nomura responsible for generating six out of the ten largest institutional allocations Largest ever European IPO in the agricultural sector 1 st Black Earth Farming Ltd. 19 December 2007 Initial Public Offering US$300 million Key HighlightsKey Terms SizeUS$300mn Pricing Date19 December 2007 ListingFirst North Stockholm Price rangeSEK 43 - 53 per SDR Issue priceSEK 50 per SDR Primary / secondary100% primary Offering structure International institutional offering Public retail offering in Sweden and Norway Market cap at IPOApprox. US$911mn (ex-greenshoe) Upsize optionup to 5% of the offering size (exercised) Greenshoe optionup to 15% of the offering size (exercised) Joint Lead ManagerNomura International plc “We are proud to see the overwhelming trust in Black Earth Farming...It is a confirmation that investors share our belief and excitement for the industry and Black Earth Farming’s opportunities.” Michel Orlov, founder and President of Black Earth Faming
Page 2 Nomura: capturing strong investor sentiment in the sector... Ordinary demand Extraordinary demand – changing diets Biofuel demand Finite supply of land Increased use of livestock Competing use of land Early stage of development Growing interest from investors Fragmented industry: Few corporate entities of scale “First mover” advantages for credible players Few major playersNovelty of sector Sustainable demand Robust pricing Strong desire for exposure Demand driversConstrained supply Soft commodities: strong investor appetite with limited opportunities for exposure “South Asia hit by food shortages” BBC, January 2008 “In Chicago wheat and rice prices for delivery in March 2008 have jumped to an all-time record, soya bean prices are at a 34-year high and corn prices at a 11-year peak.” FT, December 2007 +51% Wheat price
Page 3...to ensure best execution despite challenging markets May 2007 Black Earth Farming IPO completed “As the Russian market has grown, the deal pipeline has become more crowded, with some companies struggling to gain attention against other deals in the market at the same time. [...]” June 2007July 2007August 2007Sep 2007Oct 2007Nov 2007Dec 2007 GV Gold IPO cancelled RESO-Garantia IPO cancelled Russian Timber Group IPO cancelled OGK-6 CB cancelled Teorema Holding IPO cancelled New Russian Generation IPO cancelled % Investor confidence slumps in October “Confidence among institutional investors slumped for the second month in a row in October” Investor confidence slumps in October “Confidence among institutional investors slumped for the second month in a row in October” Wary investors desert London IPOs “Volume plummets by 75% on LSE & AiM [...] international investors continue to look for high-return oppurtunities” Wary investors desert London IPOs “Volume plummets by 75% on LSE & AiM [...] international investors continue to look for high-return oppurtunities”
Page 4 Nomura’s analyst embarked on an intensive global investor education campaign... Nomura marketing campaign Of the 1,000 accounts Nomura initially contacted, over 200 expressed strong interest Nomura selected over 100 of these investors based on quality, interest and likely order size and embarked on an extensive marketing campaign across Asia, UK and Europe Richard Ferguson Soft Commodities Research...to deliver the Company’s unique equity story to investors Last Russian “privatisation” Substantial agricultural landbank Attractive & compelling sector Proven turnaround ability Impressive management team with track record Geographic location & low cost metrics Russian government policy backing Attractive & compelling sector
Page 5 Nomura delivered high quality allocations... Regional breakdown of Nomura marketing activity Selection of Nomura generated orders Regional breakdown of orders generated by Nomura AIA/Investment Advisory Source: Nomura, by number of investors contactedSource: Nomura, by size of orders Sizeable orders from Continental Europe impacted the regional distribution of orders
Page 6...and assisted in the Company’s strong aftermarket performance SEK Source: Factset, since IPO million SDRs traded +28% Nomura is committed to supporting its clients in the aftermarket Nomura has traded over US$80 million of BEF stock to date, including several blocks of over US$10m placed with high-quality investors
Page 7 High profile and complementary coverage Black Earth digs deep The SKr1.68bn (US$255m) IPO by agricultural group Black Earth Farming was completed successfully in late December. The all-primary deal was multiple times covered and attracted demand from investors across a wide range of countries. Emerging markets accounts and specialist agricultural funds dominated the book. The company sold 33.6m Swedish depositary receipts (SDR), representing 28.1% of the enlarged share capital, and there is a greenshoe of a further 4.8m SDRs. The price was set at SKr50, in the top half of the SKr43–SKr53. The company became the largest listed group on OMX's First North exchange on December 28. The shares opened up 2% at SKr51 and rose to a high of SKr51.50 before falling back to close at SKr50. Trading volumes were fairly low with only 4.9m SDRs changing hands, representing 14.5% of the deal. The company is registered in Jersey, but is owned by two Swedish investment groups Kinnevik and Vostok Nafta. It acquires and cultivates farmland in south-west Russia, which is known for its very fertile soil and is commonly known as the Black Earth region. 5 January 2008 Russian IPO are set for a successful 2008... The last of the year’s deals to price was Black Earth Farming, a land owning company incorporated in Jersey and operating in Russia. The company appointed Öhman Fondkommission as bookrunner and Nomura as joint lead manager for the sale of Swedish Depository Receipts (SDRs). At Skr50, the SDRs were priced at the upper end of the Skr43-Skr53 range. The offer represents new shares in the form of 33.6m SDRs or 28.1% of the company’s outstanding share capital post-IPO. Trading on the Stockholm stock exchange started on December 28 and the shares reached Skr51.50 in trading yesterday. Black Earth’s market capitalisation after the offer reached $911m. There is an over-allotment option of 4.8m SDRs, or 15% of the base deal size. 4 January 2008 Russian IPO are set for a successful 2008... The last of the year’s deals to price was Black Earth Farming, a land owning company incorporated in Jersey and operating in Russia. The company appointed Öhman Fondkommission as bookrunner and Nomura as joint lead manager for the sale of Swedish Depository Receipts (SDRs). At Skr50, the SDRs were priced at the upper end of the Skr43-Skr53 range. The offer represents new shares in the form of 33.6m SDRs or 28.1% of the company’s outstanding share capital post-IPO. Trading on the Stockholm stock exchange started on December 28 and the shares reached Skr51.50 in trading yesterday. Black Earth’s market capitalisation after the offer reached $911m. There is an over-allotment option of 4.8m SDRs, or 15% of the base deal size. 4 January 2008
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