April, 2010

The Art of Making More

Bulgarian investment company

Equity financing, the experience of Todoroff winery

&

BenchMark BG Trader - the new way of trading on BSE

Participants

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Krasimir KirovKrasimir Kirov – – Business development managerBusiness development manager

Evelina AnevaEvelina Aneva – Investment banking officer– Investment banking officer

Overview

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BenchMark Finance Licensed Investment Intermediary Established in 2004Capital: EUR 766,938

Brokerage and investment banking services on the Bulgarian and International capital and financial markets

The fastest growing independent investment intermediary in Bulgaria. BenchMark Finance won the award „Investment intermediary of 2009" in the yearly ranking of Banker newspaper;

BenchMark Finance has a team of more than 25 experienced financial experts, including: 4 brokers, 5 investment consultants, 6 financial analysts etc.;

At the end of 2009 the total number of clients is approximately 6,000, including BG Trader, COBOS, brokerage services, Trader and MetaTrader clients;

Offices: Sofia, Varna, Bourgas, Plovdiv.

Overview

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Realized 9 initial public offering of shares for more than BGN 44.74 m – SAF Megalan, Web Media Group, BenchMark Fund Estates, Sopharma Logistics etc.

Realized 4 secondary public offering of shares for more than BGN 20.27 m - Todoroff, Lomsko pivo, FIA Bulgaria etc.

Realized 3 private and public bond offering for more than BGN 20.44 m – Lizingova kompania, ITD Network, Bross Holding.

Ensuring 15 debt originations for more than BGN 52.11 m.

Investment banking experience

Equity financing advantages

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The main advantages of equity financing are:The main advantages of equity financing are:

• The funding is committed to your business and your intended projects. Investors only realise their investment if the business is doing well, eg through stock market flotation or a sale to new investors.

• The right business angels and venture capitalists can bring valuable skills, contacts and experience to your business and can assist with strategy and key decision making.

• In common with you, investors have a vested interest in the business' success, ie its growth, profitability and increase in value.

• Investors are often prepared to provide follow-up funding as the business grows.

Equity financing types

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The main types of equity financing are:The main types of equity financing are:

• Ordinary shares;

• Preferred shares;

• Convertible preferred shares;

• Warrants.

Equity financing time schedule

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The different stages of going public procedure are:The different stages of going public procedure are:

• Stage 1 Preparation stage – organizing the company structure and its

activity in compliance with the additional requirements prior to going

public application (1 – 1.5 months)

• Stage 2 Main stage (3.5 – 4.5 months)

- Exchange trading permission procedure (3.5 months)

- SPO procedure – sell part of the already existing company shares to the public (4

months)

- IPO procedure – increase of the capital (4.5 months)

Equity financing types of issue procedures

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Type procedure Parameters Advantages

Closed auctionOften used(Examples: BTHolding, BTC,

EuroholdBulgaria, Lomsko pivo, CTB, Hidroizomat etc.)

• Procedure directly on the stock exchange;

• Price range or a min price;• Option for corrections of the

orders;• Visibility only of the own order.

• Usually receiving highest price (when there was not a max price) – preferred by the sellers

Book-buildingOften used(Examples: BACB, Monbat,

Todoroff, Kaolin, Bianor, Devin, Enemona)

• Procedure through an investment intermediary;

• With or without price range;• Option for corrections of the

orders;• Possibility for not equal distribution

for the different groups investors;• All market orders are graded.

• Usually receiving lowest price – preferred by the buyers

Fixed priceOften used(Examples: Chimimport; Trace

GroupHold, SBS)

• Procedure through an investment intermediary;

• Previously fixed price;• Highest over subscription;

• Highest investors’ interest.

Open auctionUsed only for offering of

unexercised rights

• Procedure directly on the stock exchange;

• Small number of all orders are satisfied;

• Visibility of all orders;• No over-subscription.

• Usually last orders are most profitable.

• Possibility to subscribe the whole issue with one last order.

Equity financing expenses

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Type expenditure Fees

Due to the Financial Supervision

Commission (FSC)

• Fee for examination of the prospectus – due in the beginning and depending on the issue amount;

• Annual supervision fee (300 BGN);

Due to the Bulgarian Stock

Exchange – Sofia (BSE – Sofia)

• Fee for admission for trade of the securities on the stock exchange – due in the beginning and depending on the issue amount and (difference between fees for official and unofficial market);

• Annual fee for trading the securities on the stock exchange;

Due to theCentral Depository

(CD)

• Fee for acquiring an ISIN code of the issue – due in the beginning, fixed amount;

• Fee for registration the securities at the CD – due in the beginning and depending on the issue amount;

• Fee for issuing of certificate for registration on the BSE-Sofia – due in the beginning, fixed amount;

• Fees for other services for issuers.

Due to the Investment

intermediary

• Fee for consultancy services on structuring the issue and preparation of the prospectus – usually is fixed amount, depending on the investment intermediary policy;

• Fee for placement of the issue – usually is % of the placed issue amount, depending on the investment intermediary policy.

Other costs • Fees for publications for the start of the public offering;• Annual audit fees;• Remuneration for an Investment relations director;• Other costs.

Equity financingTodoroff winery experience

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Issue amount: initially 800,000 shares - in case of double subscription - more 300,000

shares

Min. price: 1.60 BGN

SPO reasons: advertising and commercial publicity, access of wide range investors to

the company's shares; 

Book-building procedure:

- the orders are collected at the BenchMark office by all investment intermediaries;

- allowance of different treatment of the different groups investors - decision for equal

threatment;

- allowance of corrections on the orders;

- the price was fixed by the book-building procedure at BGNBGN 2.002.00 per share;

- satisfyng of all market orders and satisfying of limit orders which are on price over the

fixed price;

- registration at the stock exchange was realized through registration deal on the

market with the parameters of the book-building.

Bulgarian Stock Exchange – Sofia indexes SOFIX index represents a correlation of the sum of the market capitalization of

the companies within the index portfolio on the current day and the sum of the market capitalization of the same on the previous day. Only the most liquid companies listed on the regulated markets of BSE-Sofia are included in the index portfolio;

BG 40 index is based on the issues of shares of the Top 40 companies according to the number of transactions executed during the last six months; BGREIT is an index based on the free-float adjusted market capitalization of some special investment purpose companies that operate in the field of securitization of real estates and/or land, i.e. real estate investment trusts (REITs); BGTR30 index is based on the price performance of the shares included in the index portfolio, as each issue has equal weight.

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Index BGTR302007 - 2009

0

300

600

900

1,200

2007 2008 2009

Index BGREIT2007 - 2009

0

40

80

120

160

2007 2008 2009

Index BG402005 - 2009

0

150

300

450

600

2005 2006 2008 2009

Index SOFIX2000 - 2009

0

450

900

1,350

1,800

2000 2002 2003 2005 2006 2008 2009

2005Change

(%)2006

Change (%)

2007Change

(%)2008

Change (%)

2009

825.53 48.28% 1,224.12 44.42% 1,767.88 -79.71% 358.66 19.13% 427.27

2005Change

(%)2006

Change (%)

2007Change

(%)2008

Change (%)

2009

133.42 49.81% 199.88 159.19% 518.06 -79.19% 107.81 8.67% 117.16

2005Change

(%)2006

Change (%)

2007Change

(%)2008

Change (%)

2009

N/a N/a N/a N/a 1,097.48 -75.14% 272.82 22.73% 334.84

2005Change

(%)2006

Change (%)

2007Change

(%)2008

Change (%)

2009

N/a N/a N/a N/a 103.24 -52.99% 48.53 -1.07% 48.01

SOFIX base 100

BG40 base 100

BGTR30 base 1000

BGREIT base 100

.Market share by number of trades (2009)

21.0%

79.0%

BenchMark All rest 84 intermediaries

Market share by number of trades (2009)

79.0%

21.0%

BenchMark All rest 84 intermediaries

Market share by number of trades (2009)

79.0%

21.0%

BenchMark All rest 84 intermediaries

* without including the banks which operates as intermediaries 13

BenchMark Finance one of the top 3 investment intermediaries

BenchMark Finance was licensed by the Financial Supervision Commission in Bulgaria in the beginning of 2004;

The main activity of the investment intermediary is to intermediate the trade on the BSE – Sofia since receiving its license;

BenchMark Finance offers brokerage services through on-line platforms (BenchMark BG Trader or COBOS) or through a brokerage terminal;

BenchMark won the 1st place in the regular yearly ranking for investment intermediary of 2009, organized by “Banker” newspaper;

Approximately 21% of the trades executed on the BSE – Sofia are realized through BenchMark;

The intermediary is ranked 2nd for the number of trades realized on the BSE – Sofia in the last three years;

The intermediary succeed to take 3rd place for realized turnover on BSE – Sofia among all investment intermediaries* in 2008.

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BenchMark Finance’s professional trading platform

BenchMark Finance developed its own platform for trading on BSE – Sofia: BenchMark BG Trader;

BenchMark BG Trader has the following functionalities:

• automatic confirmation of the orders;

• detailed market information for each issue;

• professional charts and modules for analyses;

• instant quote updates;

• profound analysis for over 100 issues;

• option for placing different type of orders;

• variety of search criteria;

• intuitive and flexible interface;

• access to real time news;

• fluent database for each company.

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The Group overview

BenchMark Finance is part of BenchMark Group – a financial and investment company;

BenchMark Group offers financial consulting in the field of corporate finance and investment banking, investment products, real estate projects, as well as consulting and implementation of Structural Funds projects;

BenchMark Fund Estates is a real estate investment trust, which is managed by BenchMark Group. The company has diversified real estate portfolio, including office, retail, residential and holiday properties. Presently the company is completing its two main projects “BenchMark Business Center”, Sofia and “Rakovski Business Center” in the center of Sofia;

BenchMark Asset Management is a subsidiary of BenchMark Group, occupied in the field of asset management, which manages five mutual funds, one investment company and individual portfolios. The total assets under management are over EUR 10 m.

Other activities of BenchMark Finance: Intermediation in White Label Partnership (with Saxo Bank and ODL) for trading on the international financial

markets through adapted platforms – BenchMark Trader and BenchMark Meta Trader;

Investment banking services, including consulting on IPOs, SPOs and bond issues, M&A advising;

Financial consulting services, including budgeting, restructuring and optimization.

`

Contacts:

BenchMark Finance32A, Cherni Vrah Blvd., Floor 21407 Sofia, Bulgaria

Phone +359 2 962 5405+359 2 962 5481

Fax +359 2 962 5388Web www.benchmark.bg

www.bgtrader.benchmark.bgE-mail finance@benchmark.bg

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Questions?