Teaser of Institute Igalo, MONTENEGRO September, 2013
Content 1. Investment opportunity 2. Montenegro in general 3. Town of Igalo 4. The Company 5. Contact 2
INVESTMENT OPPORTUNITY IN MONTENEGRO 3
Investment Opportunity - acquisition of majority stake in the Company The largest and most important multidisciplinary health and recreational centre in Montenegro and in the region of Mediterranean at the top waterfront position. Acquisition of a majority stake (56,4806% of total capital) owned by the State of Montenegro, through the international public tender. The Investment provides an opportunity to enter a rapidly growing medical and hospitality market with a significant upside potential and to join a successful local team of medical professionals with a platform for future growth in this specific service sector. 4
MONTENEGRO IN GENERAL 5
Montenegro in general GENERAL INFORMATION Total area: 13,812 sq m Population: 620,029 (2011 census) Currency: Euro Language: Montenegrin Religion: Orthodox (72%) ECONOMIC INDICATORS (2012): GDP current prices: US$ 4.5 billion GDP Per Capita: US$ 7,259.07 Average wage: US$ 643 (03/2013) Investment (% of GDP): 19.533% FDIs: $649 millions Credit Rating According to Moody's Investors Service the outlook for Montenegro's credit rating is stable on the level of Ba3, and according to S&P the credit rating outlook is also stable on the level of BB-. 6
Tourism industry in Montenegro MARKET DRIVERS: Exceptional coast line Mediterranean climate 5 national parks 2 UNESCO locations POSITIONING : TRAVEL & TOURISM SECTOR: 15.4% GDP in Montenegro s 13.7% of total number of employees 23.6% of total investments capital 7
Tourism industry in Montenegro GENERAL STATISTICS (2012): No. of beds: 138 thousand (8/2011) Tourist arrivals: 1,4 million M ontenegro accomodation structure in 8/2011 (permanent beds) Other 0,86%% Hotels 20,27% Tourist resorts 4% Camping 1,93% Tourist overnights: 9,1 million Private accommodation 72,64%% Seasonality: 89% (June-September) Source: Monstat, April 2013. TOURISM PRODUCTS diversification has begun: Tourist overnights in M ontenegro 2006-2012 (in thousands) Domestic 5.027 6.443 6.966 6.696 Foreign 6.978 7.819 8.143 910 851 828 856 987 956 1.008 2006 2007 2008 2009 2010 2011 2012 Source: Monst at, April 2013. 8
IGALO 9
Location Town of Igalo is on the southwest coast of the Kotor Bay, Montenegro. Springs of mineral water and healing mud strongly contributed in defining Igalo as a healing-medical destination which was one of the most popular in Europe, during the period of former Yugoslavia. Mild Mediterranean climate with average temperature of 25,6 degrees in July and 9,2 degrees in January Warm and crystal clean sea, lush vegetation full of healing herbs are defining Igalo as one of the most attractive destination on the Montenegrin part of the Adriatic sea. 10
Access Igalo is easily accessible from all directions: Only 1 hour flight from Rome or Budapest, 1.5 hours from Zurich and Vienna; Dubrovnik Airport is only 26 km, and Tivat Airport 22 km away from the Institute; The main coastal road connects Igalo to the main regional centres (Dubrovnik, Mostar, Trebinje, Sarajevo) and the capital of Montengro Podgorica; Igalo is connected by sea to the Croatian port of Dubrovnik and the Italian port of Bari. 11
THE COMPANY INFORMATION 12
Ownership structure Name No. % 1 Republic of Serbia 99.187 25.94% 2 Investment and Development Fund of Montenegro 90.411 23.65% 3 Government of Montenegro 73.387 19.19% 4 Health Insurance Fund of Montenegro 39.117 10.23% 5 Employment Agency of Montenegro 13.039 3.41% 6 Valeant Pharmaceuticals International, USA 4.944 1.29% Others 62.266 16.29% TOTAL 382.351 100.00% 13
Overview of the assets - The site 2 3 5 Note: 4 1 border line of the site Total site size is around 24 ha, with following properties: 1. Phase I 4. Children department 2. Phase II 5. Promenade location 3. Villa Galeb 14
Overview of properties and facilities 4 1 6 Institut Igalo - Properties overview 3 Net developed area sqm 1 2 3 4 5 6 7 First phase - main building First phase - soliter First phase "E" department First phase Children department Inex Second phase Vila Galeb Total NDA 16.478,00 3.800,00 2.800,00 4.250,00 200,00 54.803,00 5.712,00 88.043,00 2 Source: Institut "Dr. Simo Milošević" a.d., Igalo, 5 7 15
Overview of properties and activities Institut Igalo - Accommodation capacities Number of rooms Number of beds First phase - main building 213 390 First phase - soliter 142 264 First phase "E" department 68 136 First phase Children department 48 144 Second phase 452 846 Vila Galeb 20 46 Total 943 1.826 Source: Institut "Dr. Simo Milošević" a.d., Igalo Core activities of the Institute include: 1. Medical services and other complementary services 2. Medical wellness and beauty 3. Rest and relaxation 16
Key facts and figures/1 Financial Results of the Institute in the Last 6 Years (in 000 EUR) Total Revenues Total Expenses Result 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0-2,000 2007 2008 2009 2010 2011 2012-4,000 Note: Revenues include operational, financial and extraordinary revenues. Source: Annual Reports for 2008k, 2009, 2010, 2011 and 2012, Institute Dr. Simo Milošević, April 2013. 17
Key facts and figures/2 BALANCE SHEET (thousand EUR) Long-term assets Fixed assets Long-term investments Intangible assets Current assets Inventory Accounts receivable Short-term assets Prepayments and accured income Other current receivables Cash and cash equivalents TOTAL ASSETS Shareholders' equity and reserves Shareholders' equity Reserves Non-allocated profit Profit/loss Long-term liabilities and deffered tax Long term liabilities Deffered tax Current liabilities Accounts payable Received advances Current liabilities for short-term loans Liabilities for long-term loans Other liabilities TOTAL EQUITY AND LIABILITIES 31-Dec-08 31-Dec-09 31-Dec-10 31-Dec-11 31-Dec-12 68923 67924 68546 68076 67110 68664 67751 68373 67947 66993 157 121 133 101 100 122 52 40 28 17 1438 1994 2735 2532 2879 273 164 84 131 122 547 670 856 830 1406 20 25 25 25 431 1129 1734 1518 1280 150 7 37 11 29 28 46 70361 69919 71281 70608 69989 65000 63169 61912 60871 60432 59240 59240 59240 59240 59240 209 209 194 194 194 7340 5550 3720 2478 1438-1789 -1930-1242 -1041-440 2973 4258 6232 6257 3014 2973 4258 5998 6023 2780 234 234 234 2388 2491 2762 3068 6543 1203 728 1349 886 1412 61 38 64 48 240 176 255 3432 445 210 1124 1485 728 1669 1699 70361 69919 71281 70608 69989 Source: Institut dr. Simo Milošević 18
Reasons to Invest Legacy Recognized major international canter for pediatric, adult, and geriatric rehabilitation in Montenegro and CEE, with an excellent medical reputation; Legacy of the Institute; Trends Health as a mega trend in the future; Location The Institute Dr Simo Milosevic is on a prime location in a very desirable tourism centre (Herceg Novi / Igalo), with Adriatic sea beach vicinity and limited availability for new similar projects, and next to springs of mineral water and healing mud, as a prime healing-medical destination; Expertize Strong and qualified team of recognized and highly educated personnel; Expansion Potentially unique opportunity to build up a sizeable presence in the EU markets through the excellent service at the affordable price; Good opportunity to extend the catchments' area to the CEE countries 19
Privatization procedure: rules and requirements Regulations The Institute shall be privatized through sale of the State of Montenegro shares through international open public tender, regulated by the Privatization of Economy Act ( Official Gazette of the Republic of Montenegro issue 23/96, 6/99, 59/00 and 42/04) and the Regulation on the Sale of Shares and Assets by the Public Tender (Official Gazette of the Republic of Montenegro issue no. 65/3 clean version) Authorized Body The Institute Dr Simo Milosevic s privatization shall be executed by the Tender Commission incharge for privatization, headed by Mr. Branko Vujovic, and authorized by the Privatization of Capital and Investment Council Minimum tender requirements The bidders on the subject tender for the Institute s privatization shall be expected to submit bids with the following minimum financial obligation: to provide offer for Purchase Price of the State Shares (56,4806% of total capital) which cannot be less than EUR 10 million. Proposed Purchase Price shall be one of the criteria for evaluation of the Bid. to provide guarantees for minimum capital investments into the Institute that should be at least EUR 5 million in medical equipment and EUR 20 million in reconstruction and adaptation. Proposed Investment program shall be one of the criteria for evaluation of the Bid. 20
Contact Details Ruzica Herceg, Partner Horwath HTL Croatia Ulica grada Vukovara 269a/14 10000 Zagreb, Croatia E-mail: rherceg@horwathhtl.com Tel: + 385 1 4877 200 Cell: + 385 98 367 966 Margaret Rajkovic, Director RAIFFEISEN Centrobank AG Ivana Crnojevica 50 81000 Podgorica, Montenegro E-mail: raiffeisen.mont@t-com.me or margaret.rajkovic@rcb.at T: +382 20 231 241 Cell: +382 69 058 685 Horwath Consulting Zagreb and Raiffeisen Centrobank AG have prepared this document with a due care, however Horwath Consulting Zagreb and Raiffeisen Centrobank AG do not accept any liability for the content or interpretation of the information provided. Prospective investors should rely on their own investigation, financial plans and conclusions. This document s exclusive purpose is the provision of information. 21