Vertically Integrated Sausage and Meat Producer in Ukraine February 2013

2

1. Ukraine is one of the most attractive markets in Central and Eastern Europe. It has a population of 45.5 million and convenient location between the EU, Russia and the Middle East. Between 2000 and 2007 Ukraine’s GDP grew at 7% CAGR. Ukraine also had the highest GDP growth among Eastern European countries in 2011.

2. Ukraine has many competitive advantages in agriculture. Around 43 million ha (70% of Ukraine’s total land) are arable agricultural land. Roughly 25% of all black soil in the world is located in Ukraine. Abundant land resources combined with a moderate climate, well-developed infrastructure and an educated, low-cost labor force has allowed Ukraine to become a top agricultural exporters. Still, there is a great room for improvement: due to low use of fertilizers and lack of modern technologies yields remain considerably lower than in other countries.

3. ARTA propose a foreign player build a vertically-integrated meat processing company to benefit from a growing market, lower costs and weak competition.

4. Ukrainians traditionally favor a large amount of meat and sausages in their diet. Currently, however, consumption of meat per capita in Ukraine is only 67% that of other CIS countries and 50% that of the EU. Consumption of sausages lags behind even more: 33% that of CIS peers and 25%-33% that of EU countries. Demand for meat and sausages is expected to grow significantly as Ukraine becomes richer.

5. Vertically integrated production can include growing crops, feed production, animal farming, primary meat processing and sausage production. Vertical integration will allow the company to lower costs due to economies of scale, control quality of products and capture margins at each stage of production.

6. ARTA Investment Partners can help an investor enter and successfully navigate the Ukrainian market. ARTA has a short list of potential farm and food-processing targets that would provide an excellent base from which to expand vertically .

Executive Summary

Ukraine offers excellent growth prospects

Macroeconomic Overview

The Ukrainian economy expanded at a 7% CAGR between 2000 and 2007. In 2008-2009, economic activity fell due to the global economic crisis (in 2008 GDP fell by 15.4%). The strong decline was caused by a sharp fall in exports and a significant outflow of capital.

Since 2009, the economy has begun to recover. Ukraine had the highest GDP growth rate among Eastern European countries in 2011.

In the first half of 2012, GDP growth was 2%.

In 2013, GDP is expected to grow 2.0% and accelerate in 2014 and 2015 to 4.0% and 4.5% growth, respectively.

Ukraine has significant potential for growth. GDP per capita in Ukraine is 9 times lower than in Germany and remains more then 3 times lower than in Poland.

Nominal GDP and real GDP growth

GDP per capita and GDP growth in 2011

3

5.20% 4.40% 3.30% 2.50% 1.70% 1.70% 1.70%

3.6

14

.0

17

.3

8.7

13

.0

6.9

19

.5

Ukr

ain

e

Po

lan

d

Slo

vaki

a

Ro

man

ia

Hu

nga

ry

Bu

lgar

ia

Cze

ch R

epu

blic

GDP growth GDP per capita, thous. USD

Source: State Statistical Committee of Ukraine , ARTA forecast

Source: IMF, State Statistical Committee of Ukraine

117 137 165 181 198 225 256

-14.8%

4.1% 5.2%

2.0% 2.0% 4.0% 4.5%

2009 2010 2011 2012F 2013F 2014F 2015F

GDP, USD billion GDP growth

Inflation pressure goes down

Increasing consumer incomes will fuel the economy growth

4

Households expenditures and inflation rate in Ukraine

Macroeconomic Overview

Food and non-food expenditures in Ukraine, UAH

During the turbulent years of 2008 and 2009, inflation was quite high in Ukraine: 22.3% and 12.3%, respectively.

Since then, Ukraine has curbed inflation. Inflation (CPI) grew at only 4.6% in 2011.

In 1H2012, CPI amounted to 0% (Y-t-Y). In 2012, the inflation growth rate is expected to fall to 3.5%.

Between 2009 and 2001, real wages grew at a CAGR of 8%.

In 2011, household expenditures were USD 107 billion. Household expenditures in 2012 are expected to be USD 122 billion.

In 2009-2011, the nominal disposable income (NDI) increased at an average annual rate of 9%. NDI amounted to USD 121 billion, or 74% of GDP in 2011.

In Ukraine households’ expenditures on food account for more than half of total households’ expenditures.

Source: State Statistical Committee of Ukraine , ARTA forecast

Source: State Statistical Committee of Ukraine , ARTA forecast

75 87 107 122

134 158 183

12.3%

9.1%

4.6% 3.5%

5.2% 6.0%

5.5%

20

09

20

10

20

11

20

12

F

20

13

F

20

14

F

20

15

F

Householders expenditures, USD billion CPI

520 696 768 885 1,267 1,377 1,586 1,773

384 534

675 837

1,324 1,377

1,487 1,683

0

500

1,000

1,500

2,000

2,500

3,000

3,500

2004 2005 2006 2007 2008 2009 2010 2011

Food expenditures Non-food expenditures

5

Macroeconomic Overview

Ukraine’s long-term fundamentals point to strong growth

Size

Ukraine has a population of 45.6 million and an area of 603,700 sq. km. It would be the largest country in the EU were it a member.

The market is favorably located between the EU, Russia and the Middle East. These markets contain 900 million people and generate a GDP of roughly USD 20 trillion (about 25% of total world output).

Skilled workforce

Ukraine produces the fourth highest number of graduates in Europe each year.

High education spending: 6.3% of GDP goes to education.

A strong engineering legacy remains from the Soviet Union.

Agricultural potential

Ukraine’s famous black soil is considered to be the most fertile soil on the planet. Around 70% of the country’s surface is arable (43m ha).

Current agricultural output could be tripled by improving farming techniques.

Industrial power

Ukraine is one of the top 10 steel producers in the world.

Several strong high technological industries: aerospace, shipbuilding, armaments.

Privatization

Government plans to continuing selling large infrastructure enterprises in 2013-2014.

This privatization will stimulate financial sector growth.

6

Agricultural Sector

Ukraine’s agricultural sector has many competitive advantages

Ukraine has outstandingly fertile soils: 43 million ha (more than 70% of the country’s total area) is arable agricultural land. Ukraine contains roughly 25% of all black soil in the world. Fertile land coupled with good climate gives Ukraine considerable competitive advantages in agriculture.

Ukraine also has low costs for land leases, agricultural labor and fuel.

Ukraine is already one of the most important players at global agricultural market. The country is largest exporter of sunflower oil (58% of global export market), fourth largest exporter of coarse grain in the world (more than 7% share of global exports in 2010/2011) and the sixth largest exporter of wheat (2.8% of global exports in 2010/2011).

However, current output of many agricultural products can be significantly improved by bringing in modern technologies, fertilizers and storage facilities. For instance, the average wheat yield in Ukraine is 2.7 tons/ha, compared to 6.5 tons/ha in Egypt, 7.0 tons/ha in France, and 7.2 tons/ha in Germany. Yield of barley in Ukraine is around 2.0 tons/ha compared to 4.3 tons/ha in the EU. Rapeseed yield is only 1.7 tons/ha in Ukraine, while 3.0 tons/ha in the EU.

Increasing income levels around the world and rising demand for agricultural products gives Ukraine an opportunity to boost agricultural production. The U.S. Department of Agriculture forecasts that world per capita consumption of oil will increase by 15% in 2011-2020, consumption of meat by 9% and consumption of grain by 5%. Income growth will support higher prices for agricultural products.

A number of agricultural businesses in Ukraine become significant public companies. Agricultural companies have been leaders of IPO activities and 17 companies are currently listed internationally on the Warsaw Stock Exchange, London Stock Exchange, Deutsche Boerse and others.

Source: State Statistical Committee of Ukraine, U.S. Department of Agriculture, InvestUkraine

68

39

33 33 33 36

39 43 42 44 45

0

10

20

30

40

50

60

70

1990 1995 2000 2004 2005 2006 2007 2008 2009 2010 2011

Crisis

Rebound

Consumption of meat in Ukraine is rebounding

Ukrainians ate 45 kilos of meat per capita in 2011.

Consumption of meat in Ukraine prior to the breakdown of the USSR at 68 kilos per capita was 1.5 times higher than today. Even during the Soviet era, however, per capita consumption remained lower than in European countries: in 1990 per capita consumption of meat was 75 kilos in Poland and Greece and 85 kilos in Italy and Germany.

The first half of 1990s was marked by a dramatic decline in GDP and hyperinflation. As Ukrainians became poorer consumption of meat fell by half.

After reaching a trough at the beginning of the new century, meat consumption has rebounded and begun growing in recent years. Great room exists for further growth.

7

Historical Comparison

Consumption of meat per capita in Ukraine, kg in 1990 - 2011

Source: State Statistical Committee, ARTA

Eve of USSR breakdown

Deep recession

Economic revival, GDP grows by 7.5% CAGR

Ukraine’s consumption of meat and sausages lags behind CIS

and EU peers

Compared to its peers in both the EU and the CIS, Ukraine consumes low amounts of meat and sausages per capita.

Ukrainians prefer a large amount of meat in their diet for cultural and climatic reasons. As the income level of Ukrainians grows, consumption of meat and meat products should increase substantially.

Consumption of sausages proven to be more income-sensitive than overall meat demand. Thus, as the Ukrainian GDP expands, demand for sausages should grow at a faster rate than the demand for unprocessed meat.

8

International Comparison

Consumption of meat per capita in selected countries, kg in 2011

Consumption of sausages per capita in selected countries, kg in 2011

Source: Food and Agriculture Organization of the UN Source: Food and Agriculture Organization of the UN

6

18 20 21

30

0

5

10

15

20

25

30

35

Ukraine Russia Belarus Poland Germany

3-4x lag to EU

peers

3x lag to

CIS peers

45

61

73 77

88

0

10

20

30

40

50

60

70

80

90

Ukraine Russia Belarus Poland Germany

2x lag to EU

peers

1.5x lag

to CIS

peers

Poultry and beef producers satisfy domestic market demand almost completely. Although a substantial amount of pork is imported, reliance on foreign pork has steadily declined in recent years.

Domestic supplies crowd out imports

Production and consumption of meat

9

Source: State Statistical Committee

Total balance of meat in Ukraine, th. tons, 1995-2011

2,294

1,663 1,600 1,597

1,723 1,912

1,906 1,917 2,059 2,144

-165 -125

256 243 249 200 522 399 330

165

-600

-100

400

900

1,400

1,900

2,400

1995 2000 2004 2005 2006 2007 2008 2009 2010 2011

Production Net Imports Consumption

546

480 453 428

399

57 56 34 38 36

-50

50

150

250

350

450

550

2007 2008 2009 2010 2011

Production Net imports Consumption

Beef balance in Ukraine, th. tons, 2007-2011

635 590 527

631 705

74

250 225 194 167

-250

-50

150

350

550

750

2007 2008 2009 2010 2011

Production Net imports Consumption

Pork balance in Ukraine, th. tons, 2007-2011

689 794

894 954 995

154 271

215 190 115

-300

-100

100

300

500

700

900

1100

2007 2008 2009 2010 2011

Production Net imports Consumption

Poultry balance in Ukraine, th. tons, 2007-2011

Ukraine currently produces more poultry than any other meat. Poultry is preferred by farmers due to a short production cycle, low production costs and stable high demand.

Ukraine has prospects to expand its sales to new markets: starting from 2013 Ukraine can export its poultry to the EU. Its quota for 2013 is 20 thousand tons.

There is a trend for production of meat in agricultural enterprises at the expense of households: in 2011 agricultural companies accounted for 60% of total meat production; in 2004 their share was just 32%.

Poultry is most popular due to low price

Production of meat

10

Meat production in Ukraine in volume terms, 2000

Source: State Statistical Committee

Beef, 19%

Pork, 33%

Poultry, 46%

Other, 2%

Beef, 45% Pork, 41%

Poultry, 12% Other, 2%

Meat production in Ukraine in volume terms, 2011

Kyiv region and Cherkasy are the leaders of meat production in

Ukraine

Meat production by regions

11

Source: State Statistical Committee

Kyiv 11.8%

Volin Rivne

Zhytomyr Kyiv

Kyiv region

Chernihiv

Sumy

Kharkiv Poltava

Cherkasy

Kirovohrad Dnipropetrovsk

Luhansk

Donetsk

Zaporizhya

Kherson

Crimea

Odessa Mykolayiv

Vinnytsya

Khmelnytska

Chernivtsy Zakarpatya

L’viv

Ivano-Frankivs’k

Ternopil

210 – 330 th. tons

60 – 210 th. tons

30 – 50 th. tons

Domestic demand for sausages is almost completely satisfied by domestic production. Imports account for only 2% of consumption and come mostly from Belarus. Exports are less than 1% of production. The main export market is Moldova.

There is a extremely small amount of high-quality sausages imported from European countries. These are considered delicacies.

Russia is potentially attractive market for exports of Ukrainian sausages. However, the Russian market is highly protected. Working through disputes via WTO should help Ukraine gain better access to the Russian market.

Consumption of sausages is highly correlated with income level and is expected to grow as Ukrainians become richer.

Demand for sausages is almost entirely satisfied by domestic

production

Production and consumption of sausages

12

Production of sausages and real income growth rate in Ukraine, 2004-2011

Source: State Statistical Committee

332 309

301 330 335

272 281 290

19.6% 23.9%

11.8%

14.8%

7.6%

-8.5%

16.2%

6.1%

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

0

50

100

150

200

250

300

350

2004 2005 2006 2007 2008 2009 2010 2011Production of sausages in Ukraine, th. Tons (LHS)

Real income growth, % y/y (RHS)

GDP drops by 14.8%

Crisis unfolds in Ukraine Economic growth restores GDP grows by 4.1% 5.2%

Boiled sausages. Low content of meat. May contain large amounts of soy, starch and can be vegetarian with meat substitutes or contain low-quality meat and leftovers. Made from salted mince and cooked at a temperature of about 80 degrees Celsius. Due to large amount of water cannot be stored for a long time.

Cooked sausages. Content is the same as in boiled sausages, cannot be stored for a long time. Cooked sausages are either eaten immediately after cooking or must be refrigerated.

Boiled-smoked sausages. Meat content and quality is considerably higher compared to boiled sausages. Can also contain milk, cream, flour, fat and starch. First boiled and then smoked; contain more spices than cooked sausages. In contrast to the cooked sausage (which is a homogeneous mass) boiled-smoked sausage can be composed of small pieces of a certain size.

Half-smoked sausages. In content and taste are often almost identical to boiled-smoked sausages, but loose less weight during heat processing and smoking is less pronounced. First fried, then cooked and then smoked.

Raw-smoked sausages. The highest content of meat and quality among sausages. Do not undergo high-temperature heat treatment, but rather go through cold smoking at 20-25 degrees Celsius, meat undergoes fermentation and dehydration. Maturation of raw-smoked sausages lasts at least 30-40 days. These sausages contain the greatest amount of spices and can be stored for a long time.

Smoked meats. Include natural whole-muscle products made from pork or beef and subjected to cooking, smoking and drying after preliminary salting.

Boiled sausages and raw sausages represent two-thirds of total

consumption of sausages in Ukraine

Types of sausages popular in Ukraine

13

Prices of sausages range from an average of UAH 45-50 for the cheapest boiled and cooked sausages that have inferior quality to UAH 100 or more for raw-smoked sausages with high meat content.

A peculiarity of the Ukrainian market is presence of common brands that are made by many different companies. Those brands were produced back in Soviet Union and well recognized by consumers. Nowadays virtually all companies use this brand awareness and continue manufacturing sausages with old brand names.

Common brands sausages in Ukraine are Doctorskaya, Liubitelskaya, Detskaya for boiled and cooked sausages and Moskovskaya, Zarnistaya, Krackovskata for smoked types of sausages.

Well-known Soviet Union brands of sausages are still popular

Production of different types of sausages in Ukraine

14

Source: ARTA estimates

Type Average price

USD/kilo

Common brands

Boiled sausages 6.5 Doctorskaya, Liubitelskaya, Detskaya

Cooked sausages 6.0 Shkolniye, Detskiye

Half-smoked sausages 7.0 Krackovskaya, Zernistaya, Ohotnichyi kolbaski

Boiled-smoked sausages 10.0 Osobaya, Servelat

Raw-smoked sausages 12.5 Moskovskaya, Braunshveygskaya, Presidentskaya.

Smoked meats

10.0 ham Korolevskiy, Delikatesniy, baked pork, bacon

Other 5.0 headcheese Domashniy, pâté Nezhniy

Boiled sausages and cooked sausages together represent two-thirds of total consumption of sausages in volume terms and 56% in value terms. They are the cheapest category and in some cases do not contain meat at all.

The share of high-quality meat products (i.e. those with a high meat content) is expected to grow as the Ukrainian economy expands.

Boiled sausages and raw sausages represent two-thirds of total

consumption of sausages in Ukraine

Production of different types of sausages in Ukraine

15

Production of different types of sausages in volume terms (left) and value terms (right) in Ukraine, 2011

Source: State Statistical Committee, ARTA estimates

Boiled sausages, 41%

Cooked sausages, 23%

Half-smoked sausages, 15%

Boiled-smoked

sausages, 3%

Raw-smoked sausages, 3%

Smoked foods, 8%

Other, 7%

Boiled sausages, 39%

Cooked sausages, 17%

Half-smoked sausages, 17%

Boiled-smoked

sausages, 5%

Raw-smoked sausages, 6%

Smoked foods, 12%

Other, 4%

Ukrainians used to buy significant share of food products at open markets, kiosks, street stalls or unorganized and uncontrolled vendors. In recent years, these open markets and unorganized trade are losing market share to supermarkets. In 2011, only 15% of food products sales occurred in markets. The remaining 85% took place in supermarkets of varying sizes and formats.

Two types of shops that have continued to win market share in recent years: supermarkets and corner shops.

According to a Gfk survey, 70% of Ukrainians value convenient location in a retail outlet, 56% affordable prices, 45% large variety of products and 20% freshness and high quality of products. These factors all favor supermarkets and corner shops, which are expected to continue growing strongly.

Supermarkets is the main channel of food products sales

Distribution channels of food products in Ukraine

16

Source: Gfk Ukraine

4%

5%

13%

22%

17%

39%

2%

3%

8%

15%

25%

45%

Wholesale shop

Over the counter shop

Hypermarket

Market, street

Corner shop

Supermarket

2011

2008

Channels of food products sales in Ukraine

Supermarket

Corner shop Street market

Market

Top 10 sausage producers represent around 50% of the market

Top 10 sausage producers in Ukraine

17

Source: Companies data, ARTA

Producer Trade Mark Share in 2011, volume terms Owners

Globinskiy 7.0% Private persons

Yatran 6.9% Private persons

Ukrainskiy Bekon 5.0% Ukrainian agricultural vertically integrated company

Gorlovskiy 4.8% Ukrainian large group of companies

Favorit Plus 4.8% Ukrainian large group of companies

Druzhba Narodov 4.7% Ukrainian agricultural vertically integrated company

VMP 4.6% Ukrainian agricultural vertically integrated company

Luganskiy 4.5% Private persons

Kremenchugmyaso 4.5% Private persons

Zhitomirskiy 2.7% Private persons

Top 10 sausage producers account for around 50% of the market; 85% of meat products is attributed to 35 companies.

Investment idea: Vertically integrated meat processing company

Investment proposal

18

Build a vertically-integrated meat processing company to benefit from reduced costs and capture a higher amount of margins.

The company can participate in the following stages of production: growing crops, producing feeds, raising animals, primary meat processing and producing sausages.

Vertical integration will allow the company to lower costs due to economies of scale, control quality of products and capture margins at each stage of production.

ARTA Investment Partners can help an investor enter and successfully navigate the Ukrainian market.

ARTA has a short list of potential farm and food-processing targets that would provide an excellent base from which to expand vertically .

Favorable resources, low production costs, growing demand and

weak competition all provide an opportunity to win market

Investment rationale

19

A vertically integrated meat processing company is expected to benefit from the following:

Favorable resources and low agricultural production costs. With some 25% of world’s black soils and a moderate climate, Ukraine’s agricultural sector has been blessed by nature. Ukraine is the largest world exporter of sunflower oil, 4th largest exporter of coarse grain and 6th largest exporter of wheat. Ukraine also has low costs for land lease, agricultural labor and fuel.

Significant potential to increase yields. Crop yields are half those in the EU due to low fertilizer use and a lack of modern machinery. Harvest crops are often lost because of inadequate storage facilities.

Benefit from improving technologies at meat processing plants. Most, if not all, Ukrainian meat processing factories are legacy of the USSR and have not been retrofitted for decades. These facilities are extremely capital extensive. Companies bringing modern technologies to the market will enjoy far more competitive operating costs.

Demand is strong both domestically and globally. As the economy expands, Ukrainian demand for food, especially meat, is rapidly growing and should approach European levels in the medium-term. Continuously increasing world population and incomes means demand and prices are rising for agricultural products around the globe as well. In 2011-2020, global demand for meat per capita is expected to grow by 9%.

Platform for exports. Abundant resources, low costs, a well-developed transportation network and proximity to 500 million customers in the EU and the 250 million in the CIS makes Ukraine an excellent platform for exports.

Opportunity to win significant market share quickly. Domestic competitors are weak, and no significant foreign players have entered the meat processing market. A vertically integrated company with modern technology and efficient management will be able to capture sizeable market position.

Vertically integrated company will benefit from capturing

margins, economies of scale and high quality of products

Structure of vertically integrated production

20

• Crops growing allows to enter profitable agricultural market in Ukraine with further opportunity to consolidate land. Yield can be sold at wholesale market and used for feeds.

• Barley, corn, grain, hay are all important components of animals’ feeds.

+10%

+10%

• Animal farming brings benefit of having a reliable supply of meat and not depend on insecure deliveries from other companies and households or imports.

• Internal meat processing facilities let company produce fresh meat of high quality. This factor gives competitive advantage with regard to companies that buy meat from external parties. Meat can be used for production of sausages, retail sales to consumers or carcasses of animals can be sold as they are either to domestic or foreign markets.

• Production of sausages is a top level of vertical integration. Final product will benefit from lower costs due to economies of scale and from capturing margins during vertically integrated production. About 10% margin can be taken from growing crops, 5% from producing animal feeds, another 10% from animal farming, further 5% from initial meat processing and 10% from production of sausages. ARTA estimates that total margins could be increased by 40%.

+5%

+10%

+5%

+40%

Margins

Margins total

ARTA has been helping companies and individuals successfully

navigate the Ukrainian market since 2002

21

ARTA is a leading Ukrainian investment company that offers a full spectrum of investment banking, asset management and brokerage services to corporate and individual clients.

2002

ARTA founded as investment bank focused on the

Ukrainian market

2005

ARTA launches first asset management

vehicles

2003

ARTA Securities opened and the company begins

offering brokerage products to clients

2009

ARTA begins work on high-profile restructurings

2011

ARTA begins private equity activities

2005

ARTA raises debt for first municipal client, City of

Kharkhiv

2003

ARTA begins debt advisory business

for Ukrainian firms and state

companies

2006

ARTA begins working on buy-side and sell-side M&A

deals

Our senior team possesses deep local market expertise and

international experience

ARTA Senior Management

22

Timur Khromaev, Managing Partner

Founding partner of ARTA Investment Partners

Extensive track record of executing major transactions in the Ukrainian market for both corporate and government clients

Held major positions at NRB-Ukraine bank and TAS-Investbank prior to founding ARTA in 2002

Began career at the Ministry of Finance, where he led the successful restructuring of Ukraine’s USD 2.7 billion commercial debt and its USD 500 million debt to the Paris Club

Bachelor’s Degree in Economics from Union College in New York

Larisa Primenko, Director

Head of ARTA's fixed income practice since 2003

Completed corporate bond placements, equity deals, and advisory projects in banking, energy, agriculture and other sectors.

Also involved in a number municipal and sovereign borrowings and debt management.

Began career at the Ministry of Finance, specializing in sovereign Eurobonds and capital markets.

Master's Degree in Finance from Kyiv National University of Trade and Economics; and a Specialist Degree in Physics from National Shevchenko University, Kyiv.

Giles Farley, Director

Head of sales and marketing for ARTA’s investment banking division since 2008.

Prior to joining ARTA, spent four years in the United States, Europe and Asia as a Vice President for Citigroup.

Led a team responsible for managing the Citigroup’s USD 14 billion consumer liability portfolio in Germany.

Also worked as a management consultant for the Boston Consulting Group and as an investment analyst for Dialogue Capital Management, a New York-based hedge fund.

M.B.A. from Stanford’s Graduate School of Business and a B.A. in Political Science from UCLA.

ARTA has successfully completed transactions across a wide

range of industry sectors

23

UAH 30 mln.

Corporate Bonds Issue

Co-Lead Manager

2003

UAH 400 mln.

Corporate Bonds Issue

Financial Advisorr

2003

Strategic Advisory

2003-2005

USD 45 mln.

Pre-Export Loan

Financial Advisor to Naftogaz

2003

UAH 60 mln.

Corporate Bonds Issue

Co-Lead Manager

2004

USD 500 mln.

Eurobond Issue

Financial Advisor to Naftogaz

2004

UAH 430 mln.

Corporate Bonds Issue

Co-Lead Manager

2004

USD 20 mln.

Long-Term Syndicated Loan

Financial Advisor to the Borrower

2004

Financial Advisor

to the Lead-Managers

2004

Debt Strategy Advisory

2004

USD 250 mln.

Eurobond Issue

Financial Advisor to

the Lead-Managers

2004-2005

UAH 40 mln.

Corporate Bonds Issue

Sole Lead Manager

2005

City of Kharkiv

UAH 100 mln.

Bonds Issue

Co-Lead Manager

2005

Financial advisory on

equity and debt financing

2005

USD 500 mln.

Floating Rate Bonds Issue

Financial Advisor to

the Lead-Managers

2006

USD 120 mln.

Long-Term Capital Raising

Financial Advisor to the Borrower

2006

Strategic Advisory and

Liability Management

2006

Staggered acquisition of 76% of CREDO-CLASSIC IC

by UNIQA Versicherungen AG

Financial Advisor to Credo-Classic

2006

Acquisition of 100% of

Raiffeisenbank Ukraine

by OTP Bank (Hungary)

Financial Advisor to the Buyer

2006

UAH 30 mln.

Corporate Bonds Issue

CJSC Galychyna

Lead Manager

2007

UAH 50 mln.

Corporate Bonds Issue

CJSC Nidan+

Lead Manager

2007

UAH 30 mln.

Corporate Bonds Issue

OJSC Kievmedpreparat

Lead Manager

2007

Acquisition of 74% of

OJSC Vitaminy

by SOPHARMA AD (Bulgaria)

Financial Advisor to the Sellers

2007

UAH 30 mln.

Restructuring

of Corporate Bonds Issue

OJSC Kievmedpreparat

Financial Advisor

2008

UAH 60 mln.

Restructuring

of Corporate Bonds Issue

(Series A, B, C)

CJSC Galychyna

Financial Advisor

2009

Why we believe we can create value for our clients and partners

ARTA has over ten years experience helping firms navigate the Ukrainian market. We have advised leading Ukrainian and international companies on a variety of

transaction types. We have a strong quantitative focus with a team of analysts that provides specialists

responsible for research, valuations and other analysis.

1. Investment banking expertise in Ukraine

ARTA is a true boutique advisory firm and only takes on projects to which it can give senior focus.

ARTA managing partner Timur Khromaev would personally supervise this project with support from two directors and a team of analysts.

2. Senior commitment

ARTA owned by its management and not backed by larger business interests.

The firm has relationships that span across the Ukrainian business community in terms of both industry and geography.

ARTA can approach any potential buyers as an honest broker.

3. Honest, independent advice

Timur Khromaev, ARTA’s managing partner, had extensive experience working at the highest levels of government in Ukraine prior to founding ARTA.

ARTA maintains relationships with a number of officials in the legislative and executive branches, including regulators and licensing bodies.

ARTA is not tied to any political party.

4. Unparalleled political savvy

Four reasons to work with ARTA

24

25

Contact information

ARTA Investment Partners

4 Muzeiny Lane, Kyiv 01001, Ukraine

Telephone: +380 (44) 490-70-26

Fax: +380 (44) 490-70-27

arta@arta.ua

www.arta.ua

This Report has been prepared by ARTA Investment Partners (ARTA) and is being furnished to the limited parties solely for the purpose of exploring prospective investments in the meat processing sector of Ukraine. The information provided below and any other information you may receive, either in writing or orally, is confidential. This Report describes information compiled for the convenience of parties interested in investing in the meat processing companies to help them to make a preliminary decision whether to invest in the market. This Report may not be considered as any recommendation or suggestion to any prospective investor to make any decision in this regard. Any user of the information provided below should rely upon his/her independent research and judgment.

Larisa Primenko Giles Farley

Director, Investment banking and corporate finance Tel: +380 (44) 499 4446

mob: +380 (67) 504 3888 Larisa.Primenko@arta.ua

Director, Investment banking and corporate finance Tel: +380 (44) 490 7026

mob: +380 (67) 534 5969 Giles.Farley@arta.ua