Investment Opportunity in Cyprus Development of an International Trade and Exhibition Centre June, 2016 Preliminary Market Document
Opportunity summary Investment opportunity Participate in the development of a unique merchandising exhibition and business Centre, for the promotion, marketing and sales of Chinese products in Europe, the Eastern Mediterranean and Middle East region. The project is fully aligned with China’s development strategy and relevant framework, as announced by the Chinese leader Xi Jinping. The project aims at promoting, Chinese light industry products internationally within the framework of the Chinese Government’s One Belt One Road initiative. This is a far reaching strategic initiative aiming at enhancing the economic relations of China within Europe, Asia and Africa. The promoters and the team IMC International Merchandising Centre Ltd (hereinafter ‘’the Company’’ or ‘’IMC’’) is the main promoter of this project. The Company was incorporated in the early 80 ’s and is the developer of one of the largest exhibition centres in Cyprus. IMC has a long experience in the organisation and the hosting of trade events and exhibitions. The IMC team is comprised of dedicated professionals with years of relevant experience and strong expertise. Team members have held key Government positions and private sector senior management posts during their long careers and have excellent network connections within Cyprus and abroad, capable to materialise the business plan. The team is further complemented by the CLBIZ task force engaged specifically for the project. The Project and Strategy IMC plans to upgrade and convert its existing centre into a form suitable to accommodate the proposed business venture. For the purposes of this new business the Company entered into a strategic agreement with China Light Industry Cross-Border Investment Co Ltd (‘’CLIBIZ’’) an industry intermediary organization with service and management functions across China under the auspices of the Chinese government. This partnership provides a significant advantage to the Company since CLIBIZ has the capabilities and appetite to generate the required demand from a large network of Chinese suppliers. CLIBIZ has already established a fully dedicated team based in China with the objective of promoting the venture and attracting local manufacturers to participate in the exhibitions. Page 2
Opportunity summary The Investment Rationale • Through the transaction, IMC’s shareholders aim to raise funding in the form of either debt or equity. The funds will be used to fund part of the conversion of the existing IMC centre into an International Exhibition Merchandising Centre. • This is a unique investment opportunity offering a minimum guaranteed return on investment of 10%. The return is secured through a positive cash flow generated by the product and also backed by high value assets of the • promoters. Capital Requirements The total capital required to fund the development and launch of the first phase of the project is estimated at around € 3.0 million, from which € 2.5 million will be used for construction activities relating to the building conversion and € 0.5 million for the initial marketing and promotion. Mode of investment The promoters are open to any serious proposal including but not limited to the following option: Preference Shares/ Convertible Bonds • The Company will issue preference shares or convertible bonds for the investment amount. The shares/bonds will have a 10% annual coupon, redeemable in three years time. • • In the case of default or at maturity, the investor can also be provided with an option to convert the shares/bonds into ordinary shares under a pre-agreed price mechanism. The agreement could also include additional safeguards for the investor; such as restrictions on the raising of additional capital • or the sale of shares/assets of the Company by the shareholders without the investor’s consent etc. Other real estate assets of the Promoters could also be used as collateral. • Notes: 1. It is noted that the promoters are planning to list the project in the Cyprus Stock Exchange (CSE). This could provide an additional exit route to the investor. 2. It is also noted that the investor might be entitled under certain conditions to benefit from the investment with the issue of a Cypriot passport under the relevant government naturalization scheme. Page 3
Euro China Permanent Exhibition & Merchandising Centre Euro China business and Merchandising Centre IMC will be developing the proposed project under the name Euro China Business and Merchandising Centre (‘ECBMC’) . The Vision The vision for the ECBMC is to create a unique venue promoting trade and business exchanges between Chinese enterprises and their counterparts from European states and other Cyprus neighboring countries in the Middle East and North Africa. The ECBMC will provide international traders the ability to inspect and order the products without having to travel to China. Operational Model ECBMC will operate within the framework of the strategic cooperation agreement between the Promoters and the China National Light Industry Cross-Border Investment Organization. The Centre will be transformed into a purpose-built permanent exhibition and merchandising Centre, constructed in accordance to European standards and specifications. The conversion and operation of IMC’s existing exhibition centre into the Euro China Business and Merchandising Centre, will utilize a wealth of expertise and knowhow accumulated throughout the years, focusing on bringing together Chinese exhibitors originating through CLIBIZ and trade buyers from the lucrative regions of the Middle East, Southern Europe and North Africa. Advantages Currently there is no identical or similar project involving Chinese exhibitors, promoting and trading their products, neither in Cyprus nor in nearby regions of Europe, Middle East and North Africa. The establishment of the Centre shall create a unique opportunity for small and medium traders from Europe and the wider region to select and procure from a big variety of Chinese Light Industry products. The Centre shall also contribute to the strengthening of the economic relations between Cyprus and China, in line with the treaties signed between two governments. Page 4
Promoters and CLIBIZ partnership Company Background & History Strategic partnership with CLIBIZ The Company was incorporated in 1983 and its main activity is the • China Light Industry Cross-Border Investment Co Ltd (‘’CLIBIZ’’) is • organisation and hosting of international trade events. In 1995 an industry intermediary body under the Chinese government, IMC completed the development of the existing exhibition centre at acting as an umbrella organisation for about 650,000 businesses a strategic location in the entrance of Nicosia. The IMC Centre has with exports totalling about $900bn. As part of its agenda, CLIBIZ been used, since then, as an exhibition and retail centre hosting aims at turning Cyprus into a real gateway for Chinese SME’s to among others, high profile exhibitions like ‘’The Best of China Europe and the wider surrounding regions. featuring Chinese products and services’’, the ‘’Fast Fashion Fair’’, CLIBIZ is controlled by a government organization, the China • the ‘’International Technology Fair’’, the ‘’International Travel & National Light Industry Council (‘’CNLIC’’) . CNLIC was established in Tourism Fair’’ and the ‘’International Franchising Exhibition’’ . It 2001 and its goal is to act as a bridge between the Chinese also operated as a successful shopping mall for a number of years, government and the private sector, representing a wide range of under a lease agreement hosting a number of international brands. the service and production enterprises. The organization promotes In parallel, in the period between 2000-2008, part of the building the development of the light industry in China and strengthens the was also home to the Cyprus Stock Exchange. relevant international exchange and cooperation. During the last years the Promoters saw the opportunity of Cyprus • As already noted the strategic agreement signed between IMC and • becoming a trade hub between East and West and for these CLIBIZ provides for a cooperation between the two parties with the purposes decided in October 2015 to develop the ECBMC, utilising aim of establishing the ECBMC centre as a permanent showcase for its long-standing relationships with the Chinese business world. Chinese products with emphasis on those of the Light Industry sector. Legal structure CLIBIZ has already established a fully dedicated team based in • China, working exclusively on this cooperation and the promotion of ECBMC to local manufacturers and regional associations across the whole of China. The agreement with CLIBIZ provides for a minimum number of • exhibitions in a year, thus guaranteeing the demand side for the product. Note: CDFC Cyprus Development and Finance Company Ltd (‘’CDFC’’) is the holding company of IMC. This Company has almost three decades of experience in organising International Exhibitions and Trade Shows. Page 5
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