AIM LISTING FOR FOREIGN ISSUERS RAISING MONEY IN LONDON September 2006 Zimmerman Adams International...

AIM LISTING FOR FOREIGN ISSUERS RAISING MONEY IN LONDON September 2006 Zimmerman Adams International Ltd A Practitioners View Zimmerman Adams International Limited Registered in England and Wales No. 5136014; Registered Office: One Threadneedle Street, London EC2R 8AW Authorised and Regulated by the Financial Services Authority Member of the London stock exchange

AIM 2006 . Zimmerman Adams International Ltd - Zimmerman Adams International Limited Registered in England and Wales No. 5136014; Registered Office: One Threadneedle Street, London EC2R 8AW Authorised and Regulated by the Financial Services Authority

Presentation Index ContentsPage AIM A Viable Alternative3 Availability of Equity Capital for International Companies in London6 Recent and Relevant Empirical evidence14 Highlights of the March 2003 LSE Study of New Issuers18 Valuation25 Liquidity29 What makes a Company Suitable34 ZAI Unique Qualifications36 Appendices A: Access to Equity Capital German Companies40 B: Case Study: BKN44 C: Recent Articles48 D: London Stock Exchange: AIM Brochure50

. AIM 3 6 14 , () 2003 18 25 29 34 ZAI36 A: 40 B: : BKN44 C: 48 D: : ( ) AIM50

AIM: A Viable Alternative

AIM: a Viable Alternative Lack of credible local alternatives: German market: Neuermarkt shut down French market: very quiet Italian market: closed, for the moment Other Europeans: not significant Natural appeal of Quoted Equity to the Small/Mid-cap company Owner/Manager Why do Foreign Companies consider AIM?

AIM: : : Neuermarkt : : : / / AIM?

Advantages Advantages of AIM for foreign Companies: The London Market represents a Quality brand for many continental companies. Liquidity, and far more liquidity than a few years ago Availability of Institutional Investors for Small caps Availability of Research support for small caps Availability of market-making facilities (that work) Better pre-money valuations (compared to PE) Higher public profile (attracts many Owner/Managers) Quality Exchange, Admission, and Continuing Obligations standards Access to equity capital for current and future growth

AIM : . , ( ) ( PE ( )) ( /) ,

Availability of Equity Capital for International Companies in London: (Dont take my word for it look at the empirical evidence)

LSE Companies

AIM: International focus Source: London Stock Exchange trade statistics Jan 2005

AIM: : 2005 . AIM 2004. 2005. 20 30 40 50 60 70 80 90 100 110 120 04 04 04 04 04 04 04 04 04 04 04 04 05 6.0% 7.0% 8.0% 9.0% 10.0% 11.0% 12.0% AIM AIM AIM

Quoted Equity - By way of Comparison: Euronext vs. LSE for 2003

: 2003.

Source: Thomson Financial, International Target Cities Report 2000 Quoted Equity Again: Size of the Investor Base

: Thomson Financial, International Target Cities Report 2000 : 0 500 1,000 1,500 2,000 2,500 3,000 - - - , . .

Source: London Stock Exchange Institutional Investors on AIM

: AIM 1% 7% 7% - 57% 28%

Institutional Investors on AIM Growth Company Investor Survey: August 2003 On the basis of interviews with Institutions: AIM dedicated Institutions owned 4.46 billion Approx. 35 % of the AIM market There were over 900 Institutions investing in the shares of AIM companies So inclusion, lets say somewhere between: 35% and 55%

AIM : 2003 . : , AIM, 4,46 . 35% AIM 900 , AIM , 35% - 55%

International Companies in London As at the end of May 2006, there were over 860 international companies quoted in London, with market caps of less than 100 million AIM team estimates show there are some 8,000 companies quoted on Designated Markets that could be targets for a Fast Track listing !! This is not just a new regulatory wrinkle, this is an entirely new market.

2006 860 100 . AIM 8000 , , !! , .

Can you raise Capital in London Today? Recent and relevant empirical evidence

Quoted Equity: The London Stock Exchange (2006) millionMain ListAIMTotal as at May 2006UKIntlLondon Equity Market Value1,787,7002,256,70074,1994,118,599 Total No. of Companies Listed1,3263251,5283,1793,179 Equity turnover (Jan 06-May 06) 1,418,773 1,462,76128,6342,910,168 New Equity Money Raised 20062,4072,6814,4109,497 Further Equity Money Raised 20063,2946622,8766,831 Total Equity Raised (2006)5,7013,3427,28616,329 Source: Statistics, the London Stock Exchange and AIM

: (2006.) . AIM 2006 .- - ( ) 1,787,7002,256,70074,1994,118,599 , 1,3263251,5283,1793,179 ( 06 - 06) 1,418,773 1,462,76128,6342,910,168 , 2006. 2,4072,6814,4109,497 , 2006. 3,2946622,8766,831 , 2006. 5,7013,3427,28616,329 : , AIM

A Record 8.9bn was Raised on AIM in 2005 Source: Statistics, the London Stock Exchange and AIM

2005 AIM 8,9 . : , AIM , AIM, . .. 0.0 1,000.0 2,000.0 3,000.0 4,000.0 5,000.0 6,000.0 7,000.0 8,000.0 9,000.0 10,000.0 199519961997199819992000200120022003200420052006

AIM dominated the European IPO market over the financial year 2004 with 65% of all IPOs Breakdown of the Western European IPO Market Financial year 2004/2005 Main Market 18% AIM 82% LSE 79% Other 1% Euronext 7% Madrid 1% Scandinavian Exchanges 8% Borsa Italia 2% Deutsche Borse 2% London Attracts Companies Seeking to Raise Capital Source: Statistics, the London Stock Exchange and AIM

AIM IPO 2004 , 65% IPO IPO 2004/2005 18% AIM 82% 79% 1% 7% 1% 8% 2% 2% , : , AIM

Highlights of the March 2003 LSE Study of New Issuers

This independent study covered those domestic companies who raised money on one or another of the London Markets for the (16 month) period between July 2001, and November 2002. The study is all the more interesting, as it covers a period 2002 that was, by all accounts, one of the most appalling years on record for the London Capital Markets. Nevertheless Recent Empirical Evidence: Highlights of the March 2003 LSE study of New Issuers

, 16 2001 . 2002 . , 2002 , , , . , . : 2003.

Recent Empirical Evidence - Quoted Equity: Highlights of the March 2003 LSE study of New Issuers (cont.) Were your original objectives in going public met? 80% yes Did you achieve your price objectives 77% yes Did more than of your funds come from Institutions? 78% yes Highlights Overall Satisfaction:

: , 2003. () ? 80% ? 77% ? 78% :

Highlights Why did you decide to Go Public: to raise equity 71% yes to achieve a higher profile for the Company 10% yes to establish more Credibility for the Company 10% yes Recent Empirical Evidence - Quoted Equity: Highlights of the March 2003 LSE study of New Issuers (cont.)

: 71% 10% 10% : , 2003. ()

2002 Issuers size profile: Market Cap () 0 5m19% 5 10m30% 10 50m38% 50m - up13% Recent Empirical Evidence - Quoted Equity: Highlights of the March 2003 LSE study of New Issuers (cont.)

, 2002.: ( ) 0 5 .19% 5 10 .30% 10 50 .38% 50 . 13% : , 2003. ()

How many Institutional Investors did you visit: Main Listing:150 AIM: 20-30 Recent Empirical Evidence - Quoted Equity: Highlights of the March 2003 LSE study of New Issuers (cont.)

: :150 AIM: 20-30 : , 2003. ()

Across the Board, but primarily lead by its reputation as Europes leading Quoted Equity market, The London Capital Markets, in the midst of the worst year on record, have: Remained open Raised significant amounts of Equity for both Large and Small corporates Fulfilled the original objectives of Issuers coming to the marketplace; Therefore Why not consider coming to London for your next Capital Raise? Recent Empirical Evidence - Conclusions

, , , : , ; ? -

Valuation

AIM: A Market for Companies of all Sizes On average, AIM companies have a market value between $20m and $180m.

AIM: , AIM 20 180 . . . AIM 2006 . 2005 . 0 50 100 150 200 250 300 350 400 1810. 905.- 1810. 452,7.- 905. 181.- 452,7. 90.- 181 . 45,3.- 90 . 18,1.- 45,3 . 9 .- 18,1. 3,6 .- 9 . 3,6. -06 -05

AIM S 10 Year growth record Source: Statistics, the London Stock Exchange and AIM

AIM : , AIM 0 200 400 600 800 1000 1200 1400 199519961997199819992000200120022003200420052006 0 20000 40000 60000 80000 100000 120000 (. )

Valuation Benchmarks: Quoted vs. Private Companies

Liquidity

London A Leader in International Trading

Liquidity: International Shares in London A Very Liquid Market

AIM Liquidity: Daily Turnover (May 06)

AIM: ( 2006 .)

AIM Liquidity: 20 Most Actively Traded Securities (May 06)

AIM: 20 ( 2006 .)

What makes a company suitable ?

Fundamentally good companies Solid Value propositions This means: Generally larger size Companies than domestic equivalents Top-Line (Revenue) growth of 25-30% p.a. At least EBITDA positive Ideally PAT positive, or at least a clear indication of when profits will be shown. A clear value proposition targeting IRRs in excess of 25% N.b.: no start-ups or early stage, excepting bio-tech What are Investors Looking for? AIM

: , , () 25-30% , EBITDA , , , , . , 25% : , , ? AIM

ZAI Unique Qualifications

ZAIs Unique Qualifications ZAI is the only AIM specialist dedicated to International Companies. ZAI International has a unique investor base: comprised of Institutions that specifically invest in foreign, i.e. non-UK shares, via the UK markets. The ZAI team acted as lead financial adviser and NOMAD on the highly successful float of Rambler Media Group. Global distribution capability (European + Asian and American investors). ZAI have a proactive strategy to promote AIM to small- and medium-sized international companies.

ZAI ZAI AIM, . ZAI , , , .. , . ZAI NOMAD Rambler Media Group. ( + ). ZAI AIM .

Some of the Teams former Emerging Markets clients, many of which are from the former Soviet Union, include: Specific Qualification in the CIS Metromedia, Inc. (58 Telecom JVs in Russia and the CIS) AzTelekom (Azerbaijan state telecom monopoly) Turkcell (Fintur) Kyrgyztelecom (Kyrgyz state telecom monopoly) Caspian American Telecoms Uzbek GSM Link Telecom (Macedonia) Mobicell Bulgarian GSM Mobicom Bosnian/Herzegovinian GSM RTN Russian Telecommunications Network Rambler Media Group

, , : Metromedia, Inc. (58 ) AzTelekom ( ) Turkcell (Fintur) Kyrgyztelecom ( ) Caspian American Telecoms Uzbek GSM Link Telecom () Mobicell GSM Mobicom GSM / RTN Rambler Media Group

Conclusions The recent experience shows: Foreign Issuers CAN benefit from AIM. Such deals CAN be done, and money can successfully be raised, if left to specialist firms. Zimmerman Adams International can do them.

: AIM. , . Zimmerman Adams International.

Contact Details Zimmerman Adams International Ltd New Broad Street House 35 New Broad Street London EC2M 1NH United Kingdom Ray Zimmerman Ph: +44 (0)20 7060 1760 Fax: +44 (0)20 7060 1761 E-mail: [email protected] Dominique Doussot Ph: +44 (0)20 7060 1760 Fax: +44 (0)20 7060 1761 E-mail: [email protected] Website: www.zimmint.com

: Zimmerman Adams International Ltd New Broad Street House 35 New Broad Street London EC2M 1NH United Kingdom .: +44 (0)20 7060 1760 : +44 (0)20 7060 1761 E-mail: [email protected] .: +44 (0)20 7060 1760 : +44 (0)20 7060 1761 E-mail: [email protected] : www.zimmint.com

Case Study: BKN Appendix B

Case Study: BKN German media and entertainment company specializing in childrens animation 2003: Sales 4.5m, EBITDA 2.0m, Recently turned around New creative team New product pipeline Strong shareholder support for the AIM move Share price in Nov-Dec 2003: circa 1.5 Share price in Jan 2004: approx. 2.0 Daily trading volumes in Jan 2004: 5,000-80,000 shares (10,000-160,000)

: BKN , , 2003 .: 4.5., EBITDA 2.0., AIM - 2003 .: 1.5 2004 .: 2.0 2004 .: 5000-80000 (10 000-160 000 )

Case Study: BKN p.2 The ZAI team (then Teather & Greenwood) acted as NOMAD Fast track procedure used for the existing issued share capital of BKN to be admitted to trading on AIM (effective 16 Dec 2003) Rights offering in Germany (started 17 Nov 2003) Shares not subscribed for by the existing shareholders offered by way of private placing to institutional investors in London European-wide distribution strategy employed by ZAI: syndicate partners in the UK, France, Germany, Spain and the USA All new shares successfully placed at maximum price (1.5) and admitted to trading on AIM on 22 Dec 2003

: BKN .2 ZAI ( Teather & Greenwood) NOMAD BKN AIM ( 16 2003 .) ( 17 2003 .) , , - , ZAI: - , , , (1,5 ) AIM 22 2003

Case Study: BKN p.3 BKNs Current Share Price & Share Price Performance Source: Proquote.

: BKN .3 BKN : Proquote.

AIM LISTING FOR FOREIGN ISSUERS RAISING MONEY IN LONDON September 2006 Zimmerman Adams International...

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