AGM East Capital Private Equity, 2017-06-20 Main events of 2016 - - PowerPoint PPT Presentation

East Capital Financials Investors AB (publ) AGM

East Capital Private Equity, 2017-06-20

Main events of 2016

Divestment of several portfolio holdings

• After attempts to revive the business in the new regulatory

environment failed, Morgan and Stout was sold back to the founding shareholder in February.

• In April the CBR decided to revoke the license of FIA Bank due to

insufficient capital.

• In April, a partial divestment in Locko Bank reduced the fund's

holding to 9.99%. The fund received approx. EUR 1.9m for the shares at valuation 1xBV.

• On the back of record results in 2015, Locko Bank paid close to

EUR 900k in dividends to ECFF.

• In July, the fund sold its shares in AKI Bank to one of the

minority shareholders in the bank for EUR 4.9mn.

• In November the fund paid EUR 5.7mn in dividends to its direct

investors.

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Key events after the year end

• In February, the CBR met with Asian Pacific Bank shareholders to

discuss solutions for the bank’s impending capital adequacy issues, caused by the bankruptcy of M2M Private Bank, a fully owned subsidiary of APB.

• The CBR required APB to provision against the exposures to M2M

but granted the bank a 12 month term to comply and requested shareholders to form a plan for capital support by year end.

• In April, APB shareholders hired an advisor to run a competitive

bidding process to sell the bank or bring in a new shareholder.

• In April, ECFF agreed indicative terms for the buyout of Pivdennyi

shares.

• The board of ECFI proposed a EUR 3.2mn cash distribution via

share split/redemption mechanism. This implies a cash distribution of 6 euros per share.

Divestment process for APB launched Terms agreed for Pivdennyi exit ECFI distribution proposed

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Portfolio Overview

May 31, 2017

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EURm Country Ownership stake % of Portfolio Asian-Pacific Bank Russia 17.91% 30.1% Locko Bank Russia 10.0% 50.1% Pivdennyi Bank Ukraine 9.98% 15.3% Total Investments 95.5% Cash 4.5% Total portfolio 100%

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Performance - Ratios

All three banks struggling to keep costs down ..but are managing to maintain reasonable NIM APB 2017 performance will be affected by capital constraints

NIM Cost/Income Return on Equity 2016 Q12017 2016 Q12017 2016 Q12017 APB 7,6% 52,1%

• 13,8%

Locko 6,1% 5,4% 50,1% 56,8% 14,0% 9,8% Pivdennyi 3,0% 4,6% 57,2% 63,4% 4,7% 8,2%

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Exit plans

• The shareholders

have hired advisors who are running a competitve bidding process to sell the bank

• Currently 5-6

interested parties, but deal structure still uncertain Asian Pacific Bank Locko Bank

• The shares will be

sold back to two

• ther

shareholders of the bank

• The transaction is

expected to be completed by the end of 2017. Pivdennyi Bank

• The shares will be

sold back to the main shareholder

• The transaction is

expected to be completed by the end of 2017.

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Distribution timeline

• 20 June: AGM to resolve on a share split and redemption of

shares.

• 11 August: Last day of trading before the share split, including the

right to redemption of shares.

• 15 August: Record day for the share split and the right to

redemption of shares.

• 17 August- 11 September: Trading in redeemable shares possible.
• 13 September: Record date for the redemption of redeemable

shares.

• Around 20 September: Payment, EUR 6 per redeemable share.

ECFI AGM approval of the distribution Trading window for redemption shares in late August- early September Followed by payout in mid September

Summary and outlook for 2017

The aim is to complete exits from all the three remaining holdings this year

• Complete the sale of APB
• Finalise agreements for sale of Locko and Pivdennyi shares to
• ther shareholders, with completion by year-end
• Liquidate the fund as quickly and cost efficiently as possible

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Thank you!

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