WINSLOW DOUGLAS

AUGUST 10TH 2009

1

Private Equity in Trinidad & Tobago Presentation

Agenda2

Why is Private Equity Investment Important? The Importance of a Private Equity Operation Favorable time for Private Equity investing Private Placement Process Current Challenges Important Goals To Achieve Accomplishing Goals Risk to the Investor Risk to the Company Due Diligence Exit Strategies Conclusion

Why is Private Equity Investment Important?

3

Current sources of capital private companies utilize include: direct bank lending private placement of debt

Local capital market still lacks liquidity, but gaining strength

Conclusion: Equity financing is an important source of funding for private companies

The Importance of a Private Equity Operation

4

A private equity group will enable Investment Banks to build longer-term and closer working relationship with clients beyond the typical Borrower/Lender relationship

Opportunity to take private equity clients public and or provide M&A and other investment bank services

Strengthen client’s balance sheet enabling expansion

A private equity operation will help Investment Banks develop a disciplined and experienced team of investment analysts

Favorable Time for Private Equity Investing

5

Stock prices and valuations are low

Many companies have limited access to new financing sources

No IPO’s on TTSE since Prestige Holdings

In short, if you believe in the adage “buy when there’s blood in the streets,” now may be a good time to be in the private equity business

Private Placement Process

6

Draft the offering memorandum

Prepare the road show

Manage investors' due diligence

Structure the transaction

Negotiate the terms

Current Challenges

7

Lack of interest in Equity financing

Many family run companies gravitate towards commercial loans for expansion and growth

Fear of takeover of the business, dilution of ownership

An unwillingness to open up the books to public scrutiny and or a fear of divulgence of trade secrets

Level of disclosure required may be perceived as burdensome

Important Goals to Achieve

8

Make business owners fully aware of the benefits of utilizing Equity financing

Divert borrowing from commercial lending

Promote Equity financing as alternative source of funding

Accomplishing Goals

9

May require aid of specialist in transaction advisory services with the aim of:

Strengthening a culture for information disclosure

Provision of adequate intermediary support

Addressing issues of proper corporate governance to achieve transparency

Succession planning and exit strategy for business owners

Risks to the Investor

10

Investors may incur “illegality risks” by being tarnished with illegal or unethical activities of companies in which they invest. Examples: tax fraud, money laundering, etc

Lack of a reliable legal framework for the protection of minority rights, investors may be unable to protect their rights as a minority investor

However, considerable progress has been made recently in the areas of transparency, corporate governance, shareholder rights, enforcement procedures (arbitration, etc.)

Risks to Companies

11

Companies may be subjected to (at least in their view), excessively intrusive and offensive influence by the private equity investor in the operations and management of the company

The company’s culture may change

The original owners, especially if a family group, may lose operational control of their company which they view as a family right or heritage

Due Diligence

12

Conduct careful and extensive due diligence to reduce risk

Financial Statements – Assess the accuracy of a company’s “official” financial statements What is the real financial picture of the company

Discovering illegal activities and conduct: Bribery of local officials Environmental misdeeds Labor law violations

Assuming the foregoing problems can be cleared up, what impact will this have on the company’s profitability?

Exit Strategies

13

Possible Exit Strategies:

Acquisition of the investor’s shares by a strategic investor

An IPO offering

A put option to sell shares back to the company or to certain principal shareholders at a specified time or upon a particular event

Tag-Along and Drag-Along Rights

Conclusion

14

Private equity investment an important source of funds for companies

Private equity is an important product and service for commercial and investment/merchant banks

Timing may be right for private equity

Do due diligence to reduce risk and to exercise some control

WINSLOW DOUGLAS

15

Thank You