teaser jrb english 2010

8/3/2019 Teaser JRB English 2010

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INVESTMENT OPPORTUNITY PRESENTATION

privatization ofinland and international waterway transport company

jugoslovensko reno brodarstvo

July 2010
http://www.bpa-london.biz/index.html


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Investment Opportunity Presentation

INLAND AND INTERNATIONAL WATERWAY TRANSPORT COMPANY

TABLE OF CONTENTS

1 Purpose of Presentation .................................................................................................................3

2 Notice to Recipients ....................................................................................................................... 3

3 Investment Opportunity .................................................................................................................3

4 River Transport In Serbia ..............................................................................................................55 Introduction to the Company .........................................................................................................6

6 Activities ........................................................................................................................................ 6

7 Organizational Structure and Labour Force ..................................................................................8

8 Financial Reports ......................................................................................................................... 10

9 Future Prospects .......................................................................................................................... 11

10 Country Profile .......................................................................................................................... 11

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1 Purpose of Presentation

The Privatisation Agency of the Republic of Serbia (the Agency) has appointed aConsortium of Consultants BPA London and Tomi & Partners Law Offices (theConsultants), to advise the Agency on the privatisation of Jugoslovensko renobrodarstvo (the Company). This Investment Opportunity Presentation has beenprepared by the Consultants for the purpose of giving brief introduction to the Companyand the market in which it operates, with the objective of soliciting expressions ofinterest from potential buyers in the forthcoming international tender for their sale to beheld by the Agency.

2 Notice to Recipients

This Investment Opportunity Presentation has been distributed solely to assist the

recipients in deciding whether or not they are interested, as potential buyers, in the saleof Jugoslovensko Reno Brodarstvo. All investors are encouraged to visit the Company.Any statements made and information included in this Presentation are made orincluded solely for that purpose.

Neither the Agency, BPA London and Tomi & Partners Law Offices, or otherconsultants, nor any of their employees, representatives or agents make any express orimplied representation or warranty as to the accuracy or completeness of any statementor information contained in this Presentation, in whole or in part, and none of suchpersons shall have any liability to the recipients relating to or arising from its or their useof any such information. The recipients are not entitled to rely on the accuracy or

completeness of any such information or statement.The Consultants draw your attention to the fact that most of the information used bythem in preparing this Presentation was furnished to the Consultants by themanagement of the Company.

3 Investment Opportunity

In the Tender, the Agency will offer to sell 70% of the socially owned capital of theCompany. The remaining 30% of the socially owned capital will be distributed: up to15% to the Companys current and former employees and at least 15% to the

Privatization Registry.According to Serbian Business Registry Agency, the equity of the Company has thefollowing structure:

Capital Structure (in %) %Socially owned 99.98Private 0.02

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The sale of the shares will offer buyers a unique opportunity to:

Acquire an enterprise which is the leaders in the Serbian waterway transportbusiness and with a significant market share in its own region;

Enter a transport sector which is likely to experience a very high growth rate in theregion, with that growth due to accelerate with economic development andplanned production increases of large industrial enterprises (such as, US Steel,Lafarge BFC, NIS, Petrohemija) who are significant users of waterway transportand the anticipated expansion of the copper mining and smelting company, RTBBor, following its privatization;

Benefit from the existing business, contacts, experience and know-how of a qualitymanagement team and skilled and experienced workforce, the ownership of a fleetof vessels and equipment;

Establish a corporate presence in a region whose geographical position providesvery important natural advantages for the intensive use of river transportation.

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4 River Transport In Serbia

Serbia has a waterway network of approximately 1,600 km, comprising:

the Danube from the Hungarian border (km 1,433) to the Bulgarian border (km845), over a total length of 588 kilometers;

the Sava, which joins the Danube at Belgrade (km 1,170), provides some 207kilometers of navigable waterway leading into the neighbouring states of Croatia,Bosnia and Herzegovina and Slovenia;

the Tisa, which joins the Danube (km 1,215), has 164 kilometers of navigablewaterway to the Hungarian border;

the Tamis and the Begej rivers which are partially canalized, provide a total of 118kilometers of navigable waterway and are part of DTD Hydrosystem;

the DTD Hydrosystem in the Province of Vojvodina, has an overall length of some600 kilometers of which over half is navigable by vessels of up to 650 tones.

On June 27, 2006, the European Agency for Reconstruction published the final versionof the Master Plan and Feasibility Studies of the Serbian Inland Waterway TransportsNetwork. This document represents the basis for further and more extensivedevelopment of the international waterway network in Serbia.

The first objective of the study was to prepare a Master Plan for Inland WaterwaysTransport in relation to the present situation and the potential capacity of waterwaytransport. The second objective was to prepare three Feasibility Studies, for:

restoring unhindered navigation;

rehabilitating the Serbian waterway transport network, taking into consideration theMaster Plan recommendations; and

defining a Port Development Plan.

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5 Introduction to the Company

JRB was founded in Belgrade in 1947, as a company specializing in public inlandwaterways transportation in the Serbian and regional inland waterway network.

In 1962 JRB was responsible for introducing new transportation technology on theDanube - the system of convoy pushing which significantly improved the capacity andefficiency of the Companys operations. In 1980, the fleet was further expanded andimproved by the introduction of the two most modern and powerful ships of the time, thebarge haulers Karlovac and Karadjordje which can haul convoys of 16 barges, withcapacity of up to 25,000 tones in the lower Danube sector.

6 Activities

JRB is the fourth largest company of its type in the lower Danube region. Its operationsspan the whole length of the Danube which is navigable by large inland waterway vessels,from Odessa on the Ukrainian Black Sea coast and Constana at the mouth of theDanube-Black Sea canal to Kehlheim in Germany. The transport of cargoes is primarilycontracted through a competitive spot market and the Company has been successful inwinning an increasing share of business, particularly in the transport of petroleumproducts and other liquids.

The following services are offered by JRB in the national and international markets:

Transport of mixed dry cargoes,

Transport of containers and liquids,

Transport of merchandise packed in bales between Danube harbours,

International freight forwarding services,

Transport of tourist passengers,

Overhaul and maintenance of ships and equipment,

Tank cleaning services for Serbian and foreign vessels,

Import and export services for its own needs and those of foreign shippingcompanies which it represents.

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Fleet capacity

Vessel description UnitCapacity

kW T

Ships 16 18,552

Push boats 14 16,783Tug boats 2 1,769

Self-propelled vessels 2 1,827 3,138

Liquid cargo 1 551 1,246Dry Cargo 1 1,276 1,892

Passenger ships 2 822

Workshop boats 2 144

Barges 122 191,072

Liquid Cargo 59 84,715

Tank barges 42 63,214Tanks 16 20,255Self-propelled vessel 1 1,246

Dry cargo 63 106,357

Covered Barges 28 46,714

Open Barges 30 50,608Gravel Barges 2 2,944Self-propelled vessel 1 1,891Closed Barges 2 4,200

Transport of Goods in Tons

2005 2006 2007 2008 2009

1,304,731

1,298,247 1,452,606 1,407,355 740,205

Sales Structure

Sales Structure (%) 2005 2006 2007 2008 2009Domestic market 30 38 58 66 40Foreign markets 70 62 42 34 60

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7 Organizational Structure and Labour Force

Employee Age Structure as at 30.06. 2009

Age -25 25-35 35-45 45-50 50-55 55-60 60+

Number of employees 5 36 104 111 125 85 9

Costs of Salaries (EUR)

Year 2005 2006 2007 2008 2009

Costs of salaries 3,779,419 4,265,833 5,260,109 5,260,984 4,013,024

Average number of employees 644 628 588 560 486

Monthly gross salary per employee 489 566 745 783 688

MANAGING BOARD

DIRECTOR

COMMERCIALSECTOR

TRANSPORTSECTOR

TECHNICAL ANDMAINTENANCE SECTOR

ASSEMBLY

BUSINESSDEVELOPMENT

SECTOR

FINANCEAND

ACCOUNTINGSECTOR

LEGALAND

HR SECTOR

COMMONSERVICESSECTOR

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Number of employees as at 21.06.2010 was 475.

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8 Financial Reports

BALANCE SHEET (EUR) 31.12.2009 31.12.2008 31.12.2007Fixed assets 25,798,529 29,197,086 28,902,660

Intangible assets 10,940 13,928 14,955

Property, plant, equipment and natural assets 25,485,260 28,816,571 28,358,263

Long-term financial investments 302,329 366,587 529,442

Current assets 2,847,163 3,874,640 4,226,465

Inventories 1,050,728 856,965 966,503

Fixed assets held for sale 44,645 86,760 28,093

Short-term receivables, investments and cash 1,751,790 2,930,915 3,231,869

TOTAL ASSETS 28,645,692 33,071,726 33,129,125

Equity 26,601,407 30,977,721 31,329,380Core capital 18,818,506 20,366,407 22,773,480

Reserves 81,730 53,058 29,999

Revaluation reserves 8,470,061 9,523,911 7,646,770

Unrealised securities holding loss 30,556 40,507

Retained earnings 749,076 1,074,852 879,131

Loss 1,487,410

Long-term provisions and liabilities 1,336,433 1,570,140 1,531,850

Long-term provisions 61,811 82,956

Long-term liabilities 97,029 118,328 198,710

Short-term liabilities 1,177,593 1,368,856 1,333,140

Deferred tax liabilities 707,852 523,865 267,895

TOTAL EQUITY AND LIABILITIES 28,645,692 33,071,726 33,129,125

INCOME STATEMENT (EUR) 2009 2008 2007

OPERATING REVENUES 8,613,518 15,022,348 14,683,779

Sales 8,301,352 14,668,713 13,934,367

Revenues from undertaking of outputs and goods for own purposes 106,642 97,397 166,246

Other operating revenues 205,524 256,238 583,167

OPERATING EXPENSES 10,136,275 15,323,257 14,307,741

Costs of material 3,355,029 6,804,936 5,666,871

Costs of salaries, fringe benefits and other personal expenses 4,020,277 5,291,295 5,268,384

Depreciation costs and provisions 1,164,226 1,391,491 1,255,853

Other operating revenues 1,596,743 1,835,535 2,116,633

OPERATING INCOME / (LOSS) -1,522,757 -300,909 376,038

Financial revenues 289,707 448,600 267,796

Financial expenses 121,384 206,078 199,600

Other revenues 204,300 1,146,218 533,592

Other expenses 139,542 357,797 323,887

INCOME / (LOSS) BEFORE TAX -1,289,675 730,034 653,939

Tax expense for the period 221

Deferred tax expense for the period 228,430 72,698

Deferred tax revenue for the period 40,533

NET INCOME / (LOSS) -1,518,105 770,346 581,241

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9 Future Prospects

The Company anticipates a continuing growth of its business over the next five yearsdue to:

Increasing economic activity in Serbia and the region as a result of economicrecovery and development and the planned production increases of largeindustrial enterprises (such as, US Steel, Lafarge BFC, NIS, Petrohemija) who aresignificant users of waterway transport and the anticipated expansion of thecopper mining and smelting company, RTB Bor, following its privatization;

Expansion of the tonnage capacity and intensity of transport movements as aresult of significant improvements in the waterway, navigation and port facilities ofthe Danube and connecting canals and waterways as part of the development of

the Trans-European Transport Network Corridor VII; An expected in Asia-Europe transit cargo traffic using the Black Sea and Danube

Basins as a result of economic growth and development and improvements in theCaspian-Volga-Don-Black Sea waterway system and the Black Sea-Danube canalconnections.

10 Country Profile

Official Name: The Republic of Serbia

Area:88,361 km2

Population: 7,498,001 excluding Kosovo-Metohija

Location: South East Europe, central part of the Balkan Peninsula

Official Language: Serbian

Capital: Belgrade

Other Major Cities: Novi Sad, Ni, Kragujevac, Kruevac, Subotica

Currency: Dinar (RSD)

Time Zone: West European time zone (GMT+01:00)

Strategic Location: Serbia is situated at the intersection of Trans EuropeanTransport Corridors 10 and 7, linking Europe and Asia.

Borders: The length of the Serbian border is 2,397 km. In the east,Serbia borders Bulgaria, in the northeast Romania, in thenorth Hungary, in the west Croatia and Bosnia andHerzegovina, in the southeast Montenegro and in the southAlbania and Macedonia.

Climate: Temperate continental, with a gradual transition between the fourseasons of the year, warm summers and snowy winters. Theaverage annual temperature is around 12 oC. The averageannual precipitation ranges from 600mm to 800mm in the plainsand between 800mm and 1,200mm in the mountains.

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Key macroeconomic indicators

Indicator 2001 2002 2003 2004 2005 2006 2007 2008 2009

GDP (in EUR million) 12,821 16,028 17,306 19,026 20,306 23,305 28,785 33,418 30,3851)

GDP per capita (EUR) 1,708 2,137 2,313 2,549 2,729 3,144 3,899 4,546 4,158Real GDP growth (in %) 5.6 3.9 2.4 8.3 5.6 5.2 6.9 5.5 -3.0Consumer prices (in %, relative to the samemonth a year earlier)2) 40.7 14.8 7.8 13.7 17.7 6.6 11.0 8.6 6.6Core inflation (in %, relative to the samemonth a year earlier)2) 20.5 4.4 6.1 11.0 14.5 5.9 7.9 10.3 4.1NBS foreign exchange reserves (in EUR mil.) 1,325 2,186 2,840 3,117 4,935 9,025 9,641 8,160 10,602Exports (in EUR million)3) 2,693 3,125 3,847 4,475 5,330 6,949 8,686 10,157 8,478Imports (in EUR million)3) -5,023 -6,387 -7,206 -9,543 -9,613 -11,971 -15,578 -17,878 -13,237Unemployment according to the Survey (in%)4) 12.2 13.3 14.6 18.5 20.8 20.9 18.1 13.6 16.1Wages (average for the period, in EUR) 89.9 151.1 176.9 194.6 210.4 259.5 347.6 358.4 337.9RS budget deficit/surplus (in % of GDP)5) -0.2 -4.3 -2.6 -0.3 0.3 -1.9 -1.7 -1.8 -3.4RS public debt (external + internal, in % of GDP) 5) 104.8 71.9 63.7 50.9 50.6 40.1 31.4 26.3 32.4RSD/USD exchange rate (average, in the period) 66.71 64.70 57.56 58.44 66.90 67.01 58.39 55.76 67.47

RSD/USD exchange rate (end of period) 67.67 58.98 54.64 57.94 72.22 59.98 53.73 62.90 66.73RSD/EUR exchange rate (average, in theperiod) 59.78 60.66 65.13 72.70 83.00 84.10 79.96 81.44 93.95RSD/EUR exchange rate (end of period) 59.71 61.52 68.31 78.89 85.50 79.00 79.24 88.60 95.891) NBS estimate. 2) Retail prices until 2006. 3) Trade with Montenegro is registered within relevant transactions as of 2003. 4) Source: Labour Force Survey, S tatistical Office. 5) Source: RS Ministry of Finance Bulletin.

Note: Data are subject to corrections in line with the official data sources.

For more information please contact:

Privatization Agency

of the Republic of Serbia

Aleksandra Jezdovi

Project Manager

Email: [email protected]: +381 11 3020 855Fax: +381 11 3020 816

BPA London Limited

Malcolm Magee-Brown

Director

Email: [email protected]: +44 20 7283 0079Fax: +44 20 7785 9173

Ivan RistiProject Manager

Email: [email protected]

Tel/Fax: +381 11 318 2211Mob: +381 64 110 9684

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