Euroventures Ukraine Fund I

Anthousa Limited
Kyiv, Ukraine

Date of initial investment:	June, 2002
Percent of shareholding:	10.2%
Total investment size:	US$ 2.5 mln.
Exit Period:	June, 2007

Company Business

Anthousa Limited owns a confiding stake in joint stock equity Furshet that operates a chain of supermarkets under the name Furshet. By the time of acquisition, the chain operated 10 stakes and dynamically grew to 15 by the end of 2002, 23 in 2003, 36 - 2004, 50 - 2005 and 67 in 2006. The Сompany is developing a larger chain in Kyiv and beyond the Kyiv market. The Сompany benefits from growing consumer spending and expansion of the supermarket segment at the expense of open markets. In mid 2007 the Fund exited this investment selling its stake to the world's 10th largest retailer the Auchan Group.


             Summary Financials (in US$ million):

       * As the Fund exited the Company, further tracking of financials is irrelevant.

Hardico Investments, Ltd. (HI)
Kyiv, Ukraine

Date of initial investment:	November, 2000
Percent of shareholding:	32%
Total investment size:	US$ 2.3 mln.
Exit Period:	July, 2007

Company Business

Hardico Investments Ltd (HI) is an English Сompany with a Cyprus Board that owns production and distribution assets in Ukraine: Rusanovsky meat processing plant and distribution company in Kyiv. The Сompany produces sausages and other semi-smoked delicatessen meat. It is one of leading operators in the Ukrainian market. The Сompany currently serves 600 retail outlets directly in Kyiv and serves other parts of the country through wholesale companies. The Fund exited this deal in mid 2007 selling its stake to Company's management.

              Summary Financials (in US$ million):

Year:	2001	2002	2003	2004	2005	2006	2007*
Sales:	11.9	13.0	11.9	13.0	17.4	17.5	n/a

       * As the Fund exited the Company, further tracking of financials is irrelevant.

 

Laona Investments Limited
Kyiv, Ukraine

Date of initial investment:	July, 2002
Percent of shareholding:	30.4%
Total investment size:	US$ 2.4 mln.
Exit Period:	September, 2006

Company Business

Laona Investments (Laona), Kyiv, is the second largest wholesale distributor of pharmaceuticals in Ukraine. Founded in 1993, the Сompany managed to grow quickly and, as of beginning of 2002, it was present in all regions of Ukraine through regional subsidiaries with market share over 8%. Laona through its own distribution network covered over 75% of all retail outlets. The Ukrainian pharmaceutical market is still fragmented; the biggest distributor has only a 10% market share. The Company's target was to become the market leader and to retain this leading position in future. The Fund realised the investment by selling its stake to Company's management.

             Summary Financials (in US$ million):

Year:	2001	2002	2003	2004	2005	2006*
Sales:	25.5	38.9	59.0	77.8	125.9	n/a

       * As the Fund exited the Company, further tracking of financials is irrelevant.

 

Orleander Limited
Zaporizhzhya, Eastern Ukraine

Date of initial investment:	July, 2001
Percent of shareholding:	55.5%
Total investment size:	US$ 3.5 mln.
Exit Period:	2008

Company Business

Orleander in Zaporizhzhya originates from a traditional producer, founded in 1946, of the popular local soft drink "kvas", which was merged with a nation-wide distribution company for branding of new soft drinks. The main shareholders of both companies formed a UK-holding through which EVU made its investment. Orleander currently has production facilities in Zaporizhzhya. The Сompany developed a technology to lengthen the shelf life of "kvas", giving it potential to dominate the local market as well as potential to export to neighbouring countries. Its own brand ("Yarilo") currently holds more than 20% market share in the domestic "kvas" market segment. Among the key strengths and opportunities the Company possesses are the following: market leader position with recognised national brand (at this moment, such segment of bottled "kvas" is associated with "Yarilo" brand name), growing domestic market, and the technology - any other player does not posses - of bottling natural "kvas" with shelf life of over 60 days versus traditional 2-3 days. In late 2008 the Fund exited this investment selling its stake to Coca-Cola.

             Summary Financials (in US$ million):

Year:	2001	2002	2003	2004	2005	2006	2007
Sales:	1.2	2.0	2.3	2.4	5.0	6.9	5.4

 

Sodelem Developments Limited
Moscow, Russia

Date of initial investment:	March, 2002
Percent of shareholding:	12.2%
Total investment size:	US$ 2.0 mln.
Projected Exit Period:	2008

Company Business

Sodelem Developments (Sodelem), is a holding company set up for the integration of two separately operating subsidiaries; the existing Russian milk production & distribution activities and the acquired Smela milk processing factory in Cherkassy region, Central Ukraine, for further expansion of the Russian activities in Ukraine. The Company is now the leading producer and distributor of condensed milk products in Russia and Ukraine, with two factories in Russia, the acquired facility in Ukraine and 8 distribution centers covering all of European Russia. Also Sodelem Developments acquired control of Erconproduct (Russian milk distribution company), Rudnya and Olym milk processing factories. EVU participates in the holding to facilitate the expansion in Ukraine. The Ukrainian market started to be addressed from 2002 onwards. The company plans to grow in Russia and Ukraine with market shares of 25% and 10% respectively, at which level the holding company withCfully merged operational subsidiaries will be a very interesting acquisition target.

             Summary Financials (in US$ million):

Year:	2002	2003	2004	2005	2006	2007	2008
Sales:	48.0	64.7	70.0	120.0	133.8	106.4	132.4

 

Statinko Limited
Cherkassy region, Central Ukraine

Date of initial investment:	May, 2004
Percent of shareholding:	20.8%
Total investment size:	US$ 2.5 mln.
Projected Exit Period:	2008

Company Business

Statinko Limited was spun-off from Sodelem Developments Limited at the beginning of 2004. Having a stable leading position in the condensed milk segment, Sodelem's management started to experiment with other products, such as canned fish, meat and vegetables. After testing the market for two years and conducting strategy review together with independent consultants, the management decided that production and distribution of canned vegetables was the business with greatest potential. Located in the fertile lands of Ukraine with secure supply of raw materials, the company is targeting the Ukrainian and Russian markets. Comparison of the acquisition criteria with the Company's projections provides us with assurance that Statinko will become an attractive acquisition target.

             Summary Financials (in US$ million):

Year:	2004	2005	2006	2007	2008
Sales:	12.8	18.5	20.3	17.3	24.7

 

Abikelly Limited
Kyiv, Ukraine

Date of initial investment:	March, 2005
Percent of shareholding:	41.7%
Total investment size:	US$ 2.5 mln.
Exit Period:	July, 2006

 

Company Business

Abikelly Limited is a Cypriot company, operating through its Ukrainian subsidiary, Budmax LLC, a chain of construction materials supermarkets under the brand name Budmax. The Company was founded as a part of holding NIK by five private individuals in 1997. From the very beginning the holding was involved in multiple activities, including production of electrical wall outlets and switches, production of paint, washing powders, wholesale and retail of construction materials, renovation of houses, trade of perfumes an cosmetics; in total, 10 entities in Ukraine, Moldova and Russia. In 2001, due to the fast development of Budmax, the shareholders of NIK decided to spin-off Budmax from the holding into a separate business. The Company's supermarkets have from 1000 to 2000 square metres and are located in Kyiv and regional centres. The strategic objective of the Company is to build the biggest chain of construction materials supermarkets in Ukraine. The Fund exited the deal by selling its stake to an undisclosed strategic buyer.

              Summary Financials (in US$ million):

Year:	2003	2004	2005	2006*
Sales:	8.0	18.0	35.0	n/a

       * As the Fund exited the Company, further tracking of financials is irrelevant.

 

Sentera Limited
Zaporizhzhya region, Eastern Ukraine

Date of initial investment:	May, 2005
Percent of shareholding:	27.0%
Total investment size:	US$ 3.0 mln.
Exit Period:	June, 2009

Company Business

Sentera Limited was founded in 2004 by consolidating big stakes in cable production entities in Ukraine and Russia: Ukrainian Cable Company (Zaporizhzhya region, Ukraine), Manych Cable and Urals Cable (both - Russia).Trade House is also part of the group. It operates in Ukrainian and Russian markets and deals with export sales. As Ukrainian and Russian economy have been steadily growing over the past several years, the demand for cable products increases. Growing machine building and shipbuilding sectors plus massive replacement of cables in the energy sector creates additional opportunities for cable makers. Although there are many players in the cable industry in Ukraine and Russia, Cable Holding possesses significant competitive advantages: sophisticated technology and high sustainable quality, access to modern research in this field produced by scientific and technological institute (located in Zaporizhzhya region), geographical coverage of two major CIS markets (Ukraine and Russia) and experienced sales force covering these markets. The Fund realised the investment by selling its stake to Company's management.

             Summary Financials (in US$ million):

Year:	2003	2004	2005	2006	2007	2008
Sales:	7.1	10.4	6.0	15.7	18.2	22.6

International Distribution Systems BVI, Ltd. (IDS)
Kyiv, Ukraine

Date of initial investment:	December, 2000
Percent of shareholding:	25.2%
Total investment size:	US$ 3.0 mln.
Exit Period:	April, 2003

Company Business

International Distribution Systems is the BVI holding company of two Ukrainian subsidiaries, JSC Mirgorod Mineral Waters Plant ("MMWP") and CJSC Industrial Distribution Systems ("IDS Ukraine"). MMWP, which produces, among other famous brands, "Mirgorodska" bottled water, is the market leader of the mineral water market in Ukraine. The Company has also developed the strongest distribution system in Ukraine, which, as of early 2002, covered over 9,000 stores in the 7 largest Ukrainian cities with direct distribution and all 25 regions with wholesale distribution. The Company was sold in April 2003 to a strategic investor, Zinerin B.V. It was the sizeable deal in Ukrainian terms and probably the largest private sale in Ukraine that year.

        * As the Fund exited the Company, further tracking of financials is irrelevant.

 

P5 Communications, Ltd.
Kyiv, Ukraine

Date of initial investment:	November, 2000
Percent of shareholding:	80.0%
Total investment size:	US$ 1.0 mln.
Exit period:	April, 2003

Company Business

P5 Communications (P5), in Kyiv, planned to merge a local internet portal with e-commerce potential with a local Internet Service Provider (ISP) offering the cheapest internet access, and with a payment system offering its customers additional benefits for participation in e-commerce. It was expected that a target volume of 50,000 subscribers would generate sufficient interest in P5 for a trade sale. Slower market development necessitated a change in strategy, which was to focus on provision of e-commerce solutions until the market would improve. The survival scenario with the changed strategy required additional equity funding, while the payback period of investments would have become much longer than previously expected. After attempts by the Fund Managers to arrange strategic alliances with US and Italian companies failed, it was decided to liquidate the company and to write off the investment.