Presentation template

1
????? ?????? ??? ??? MA ??
Hans Kim 3 March 2007 Week 1
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??? (Hans Kim)

• ??, ???? BDA ?? ??
• Deloitte, Corporate Finance
• BNP Paribas, Capital Market
• Bank Boston, Currency Derivatives
• London Business School, MBA
• ??? ??? ????, BA
• Contact
• 011 9997 9922
• hkim_at_bdallc.com

3
?? ??? ??

• ?? ??
• Corporate Finance
• Communication with Equity Investor, including
  overseas investor
• Cross border and cultural experience in finance
  industry
• ?? ??
• ??? ??? ??
• ???? ?? 40, ???? 20, ????? 20, ?? ??? 20
• ?????
• ??? ????? ??? ? ????? ??
• ?????
• ?????? ??? ????? ?? ? ???? ?? - Valuation, ??????
  ? ??????, ???? ??, ?????? ?? Exit ??, ?? ??

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??? ?? ??

• 1. ????? IR
• 2. ????? IR
• 3. ??? ??? ??
• 4. Valuation 1
• 5. Valuation 2
• ???? 1 Due Diligence ??
• ???? 2????????
• ?? ?? - ??? ??
• Note ?? ??? ??? ?? ?? ??

1. MA 1
2. MA 2
3. ??? MA
4. Hedge Fund ? ?????? ??
5. ???? 3 (??) Investor-state claim
6. ??????? ?? ??
7. ??? ??? JV
8. ?? ?? - ??? ??

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Cross Border Corporate Finance
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Introduction to BDA

• We advise on cross border MA transactions,
  strategic partnerships, capital raising and
  restructurings

• BDA was established in 1996. Since then we have
  assisted numerous multinational corporations and
  financial investors to increase strategic value
  by bringing to bear our knowledge and expertise
  on transactions and alliances between companies
  in Asia and the West
• BDA has teams of dedicated professionals located
  across Asia, the US and Europe with offices in
  New York, London, Bahrain, Mumbai, Hong Kong,
  Shanghai, Seoul and Tokyo
• We work across all industrial sectors and have
  strong regional experience in Asia
• We advise our clients on acquisitions,
  divestments, JVs, capital raising and
  restructurings. We provide corporate finance
  services in situations involving, debt advisory
  and business valuation. We also undertake
  strategic assessment studies to help our clients
  understand where the best opportunities for
  investment might lie

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Our partnership with Close Brothers gives us
strong coverage across the US and Europe

• BDA is the Asian affiliate of the Close Brothers
  Network
• Close Brothers is the premier European mid-market
  investment bank, publicly quoted on the London
  Stock Exchange with market cap US2.7bn
• Close Brothers offers its clients access to local
  and international relationships through its
  European offices and long-standing JVs with
  independent advisory firms, such as BDA,
  elsewhere in the world
• 400 professionals across Asia, North America and
  in the European financial centres of London,
  Paris, Frankfurt, Milan, Barcelona and Madrid.
  This international presence creates a unique
  global independent investment banking capability

www.cbcf.com
BDA and Close Brothers Network
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Asian coverage and global reach

• We provide advice in a pan-Asian and
  international context, not narrowly focused on
  one market

New York Euan Rellie Managing Director Charlie
Maynard Managing Director
London Andrew Huntley Managing Director
Bahrain Tim Holder Director
Seoul Hans Kim Director
Shanghai Jeffrey Wang Director
Tokyo Jeff Acton Assistant Director Noriyuki
Sonoda Executive Senior Advisor
Hong Kong Paul DiGiacomo Director
Mumbai Rohit Singh Director
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BDA has broad regional experience, and expertise
in several sectors

• Asian sector experience
• Aluminium
• Automotive
• Chemicals
• Coatings
• Consumer Goods
• Electricals
• Electronics
• EMS
• Financial Services
• Food Beverage
• Healthcare
• Industrial Automation
• Industrial Manufacturing
• IT Services Infrastructure
• Logistics
• Media
• Metals
• Mining

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Corporate Finance Service
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Assesses strategy, and identifies and executes
transactions
BDA analyzes sectors and markets in Asia, mapping
out the industry landscape, considering the gaps
and opportunities and identifying the likely
strategic opportunities.
Strategic assessment
BDA has a successful track record of helping
international corporations search for and
evaluate Asian acquisitions, divestments, JV
targets and other partners. BDA can identify and
unlock the optimal transactions.
Partner/target search
BDA designs and implements transactions which
satisfy our clients requirements and are
acceptable to the counterparty. We help clients
to identify, assess and manage teams of local
professionals, such as lawyers and accountants on
the ground, and assist in bringing transactions,
both acquisition and divestment, through to
successful completion. We help our clients to
clear regulatory hurdles.
Transaction execution
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Strategic assessment and partner / target search
Research process
Results
Strategic assessment

• Briefing with client (1-2 days)
• Detailed briefing on clients acquisition
  interest and clients views on the market/
  industry, allowing BDA to incorporate the views
  and knowledge of our clients and to best
  represent their interests.

• Regulatory framework
• Market size, growth rate and driving forces
• Industry players and competitive landscape
• Major product categories
• Raw materials supplies
• Exports potentials
• MNCs competitors activities and strategies
• Other important information vital to entry
  strategy

• Desktop research (1-2 weeks)
• Desktop research to build up our industry
  knowledge and identify a longlist of players in
  the industry.
• Use all internal info resources, external
  databases, and other sources

• Telephone conversations (2 weeks)
• Contact with the companies on the list and as
  well as other relevant parties that could provide
  useful information. This includes shareholders,
  trade bodies, regulators, suppliers, customers
  and distributors.

Profile of targets / partners

• Company overview
• Shareholding
• Product line and market potential
• Engineering, technology quality control
  capability
• Production facilities
• Sales, OEMs relationship, and logistics
• Export capabilities
• Brief financials
• Company development strategies
• Interest to sell to or team up with an MNC

• Meetings and visits (1 - 2 months, partly in
  parallel with steps above)
• Face-to-face meetings with potential JV or
  acquisition candidates selected from the longlist
  through telephone contacts and other relevant
  information providers.
• We report back on any situations that require
  swift action.

• Presentation to Client (Half day)
• Detailed summary of findings delivered to clients
  in the US, Europe or Asia

A closed-end project with clearly defined
parameters and a fixed time-scale, aimed at
identifying both the best candidates and as well
as the best routes for acquisition or
partnership.
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Buy side - Role in execution
BDA is based on the ground in Asia with strong
execution capabilities and is able to manage
effectively the day to day aspects of the
execution process on behalf of our clients.

• BDA is a flexible on the ground resource
  available to attend all meetings, on very short
  notice, reporting to the Client project manager
• BDA will help brief and guide the Client through
  the stages of an investment in an Asian market
• BDA will work with the Clients internal
  functional teams to assist in arriving at a
  valuation of the business to be acquired or JV,
  liaising if necessary with any external
  professional parties, including lawyers and tax
  advisors
• BDA assists in any negotiations with the
  counter-party or its advisers we work closely
  with the client giving clear and concise updates
  and recommendations during the negotiations
• BDA builds a strong relationship with the Target,
  providing coaching where necessary, and
  alerting the Client to potential roadblocks
• BDA will assist in managing and coordinating the
  various parties active in any due diligence
  process. BDA will help prepare the target for
  due diligence to ensure smooth completion of the
  process. BDA will assist to hire outside
  professional parties, such as lawyers and
  accountants if required. BDA will seek answers
  to and clarify with the target issues that arise
  in due diligence
• BDA will participate in the review and
  negotiation, in conjunction with the Clients
  corporate counsel and its external legal adviser,
  of the detailed terms of the definitive legal
  agreements according the local regulations,
  including for example Sale Purchase Agreement,
  JV Agreement, Feasibility Study Report and other
  necessary agreements such as technology transfer,
  service, supply, non-compete, executive
  employment, etc.
• BDA helps prepares any submissions or documents,
  as required in connection with the execution
  process, or else assists the other professional
  advisers.

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Sell side execution

• Review the sector and valuation
• Clarify key issues related to the business
  through contact with Management
• Prepare Teaser
• Begin to draft Information Memorandum (IM)
• Prepare buyer list
• Begin vendor due diligence

Step 1

• Approach potential acquirers with Teasers
• Finalize IM
• Sign NDAs
• Deliver IMs
• Receive preliminary offers
• Assess the attractiveness of each offer received
• Prepare data room

Step 2

• Advise on which bidders to be invited for
  negotiation / due diligence
• Select priority candidates
• Make data room available for buyer due diligence
• Solicit firm offers

Step 3

• Negotiate with preferred bidder
• Sign Sale Purchase Agreement
• Close transaction

Step 4
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BDAs strengths

• We offer a mix of services which has proved to be
  uniquely tailored to the needs of multinationals
  on cross border MA

Team members present in client home country On the ground industry/ strategy assessment Target/ owner profiling Understand regulatory issues Understand clients financial and other criteria Corporate finance and MA skills Target relationship and coaching skills Process continuity Handle small or mid-size transaction
BDA
Market research firm
Country-focused consultancy
Investment bank
Large accounting firm
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BDAs corporate finance activities
Capital raising
Restructuring
MA
Strategic assessment Target identification Marke
t entry strategy Buy side advisory Sell side
advisory Commercial due diligence Private
equity support
Company advisory Creditor advisory Rescue
financing Distressed and complex MA solutions
Private placements Debt capital Public
listings Project finance and offset
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MA advisory

• Seamless advisory services from pre-transaction
  strategy to execution for corporates and
  financial investors

Pre-transaction work
MA advisory

• We help clients in bringing transactions, both
  acquisitions and divestments, through to
  successful completion
• Dynamic and fast changing environments obscure
  traditional approaches to valuation and
  complicate deal structuring
• BDA designs and implements transactions which
  satisfy our clients requirements and are
  acceptable to the counterparty
• BDAs professionals have developed extensive
  experience in handling the unique issues that
  arise from cross-border, cross-cultural MA, such
  as
• Cultural sensitivities to the role of MA in
  strategic development
• Managing an MA process in more than one language
  and across distant time zones
• Divergent approaches to valuation
• Managing due diligence in non-transparent
  environments
• Educating clients entering an unfamiliar
  jurisdiction
• Coaching counterparties who have limited MA
  experience
• Ensuring that dedicated, senior on the ground
  resources are available at all times to our
  client

• Strategic Assessment
• We know that before making strategic decisions on
  investment and MA, our clients must first gain a
  clear understanding of the market in which they
  will operate
• We undertake Strategic Assessment studies which
  map out the industry, market, and regulatory
  landscape, which form the backdrop against which
  investment, partnership and MA decisions will be
  made
• Our Strategic Assessment studies are often
  conducted in conjunction with a Partner / Target
  search
• Partner / Target Searches
• We conduct a thorough search of the market using
  our clients criteria to source likely candidates
  for acquisitions and JVs
• We are not simply market researchers, and we rely
  not merely on desktop research but undertake
  intensive, commercially sensitive discussions
  with senior management and shareholders of
  potential partners or targets to ascertain which
  opportunities are both attractive and available
• BDA is transaction-oriented and delivers
  recommendations on the best options, the likely
  parameters of a transaction and the best path
  forward

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Debt restructuring and Capital raising

• Advice on distressed situations and corporate
  capital structure

Debt restructuring
Fund raising

• We advise companies and creditor groups on
  cross-border corporate restructurings involving
  Asia
• Our work is divided between advising companies
  and key creditor groups such as bondholders or
  bank syndicates
• Our approach to advising in restructuring
  situations ranges from strategic and financial
  reviews, to identifying restructuring options
  with legal and tax advisers and providing
  recommendations to the board. 
• Rescue financing
• We also source new investors and / or debt
  providers to support restructuring plans and map
  and execute negotiating strategies for
  discussions with other stakeholder groups
• Complex MA
• These often encompass complex cross-border
  situations with multiple parties involved and BDA
  can draw upon the industry leading corporate
  restructuring and debt advisory expertise of
  Close Brothers Corporate Finance

• Project finance
• Assisting sponsors to maximize returns and
  minimize risk through project evaluation, risk
  assessment, optimization of financial
  structures, financial and economic modeling,
  identifying strategic joint venture partners,
  negotiating key commercial agreements and
  raising equity, debt and other forms of project
  financing 
• Offset
• Advising governments and corporates on the
  successful realization of offset programs and
  underlying projects
• Debt advisory
• Informed, impartial advice on sources of funds
• Structuring advice based on client needs and
  priorities
• Transaction support managing entire process
• Equity fund raising
• We advise small and medium sized Asian corporate
  on sources of pre-IPO expansion capital from
  financial investors
• BDA works with selected underwriters/brokers
  covering the key Asian, European and North
  American stock markets, to help companies to
  identify the optimal market for a listing and to
  successfully complete IPO and follow-on fund
  raising

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Past and current clients
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Selected BDA clients
Company
Client revenues
Project
Sector
Automotive electronics US95bn Advisory in Asia
Chemicals US53bn Multiple acquisition target search Advisor on multiple acquisitions
Private Equity US52bn Advisor on planned divestment
Pharmaceutical US35bn Acquisition advisory in China
Chemicals US28bn Market assessment Acquisition target search
Automotive US18bn Tata Auto Comp Systems - advisor on potential acquisition in Europe
Food US18bn Acquisition target search Advisor on acquisition
Automotive US17bn Acquisition target search
Automotive US17bn Advisor on acquisition
Consumer Products US16bn MA advisor in Japan
Food US13bn Advisor on acquisition
Chemicals US13bn Advised on JV partnership and project bankability study in Saudi Arabia
Chemicals US13bn Southeast Asia investment review
Trading US12bn Advisor on divestment
Chemicals US11bn Acquisition advisor on search and assessment for targets in China and Taiwan
Technology US8bn Advisor on multiple divestments
Chemicals US8bn Advisor on JV
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Selected BDA clients
Company
Client revenues
Project
Sector
Chemicals US8bn Acquisition target search in North Asia
Industrial and hi-tech manufacturing US7bn Acquisition target search in North Asia Advisor on acquisition
Automotive US6bn Advisor to the Administrators for valuation and realisation of Federal Mogul companies in Europe and Asia
Technology US6bn Advisor on JV, and formulation of China strategy
Auto / Industrial US6bn Acquisition/JV target search and advisor on acquisition
Tech/logistics US6bn Market entry opportunity and competitive study Advisor on acquisition
Automotive US5bn Acquisition target search Advisor on acquisitions in Korea and China
Automotive US4bn Market assessment in China and rest of Asia Acquisition advisory in China
Chemicals US4bn Advisor in Asia
Automotive US4bn Partner evaluation
Chemical US3bn Multiple target searches in Asia Acquisitions advisory in China, India and SE Asia
Plastics US3bn Acquisition target search ex-Japan
Chemicals US3bn Acquisition/JV target search Advisor on acquisition
Chemicals US2bn Acquisition target search, and advisor on acquisition China strategy formulation
Chemicals US2bn Acquisition/JV target search Advisor on acquisition
Aluminum US1.7bn Strategic direction and MA in Asia and the Mid East
Technology / Electronics US1.5bn Global MA advisory
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Selected BDA clients
Company
Client revenues
Project
Sector
Chemicals US1.3bn MA advisor in Japan
Retail US1.3bn Advisor on restructuring in SE Asia
Automotive US1.0bn Advisor on strategic alliance in Japan
Automotive US1.0bn Acquisition target search
Industrial US913m Advisor on acquisitions
Plastics / Aluminum US956m Acquisition/JV target search Strategic alliance and JV in Japan
Automotive / leather US843m Target search and acquisition advisory in Asia
Industrial / Chemicals US580m Asia strategy and MA analysis
Plastics processing US380m Strategic assessment and target search in China
Aluminum US250m Strategic direction and MA in Asia and the Mid East
Technology N.A. Acquisition/JV target search
Government / Industrial / Chemicals N.A. Advisor on MA in Europe/ Middle East/ Japan
Private equity N.A. (US6bn fund) Investment analysis and corporate finance advisory in Korea
Investments management / PE N.A. (US4.5bn fund) MA and commercial due diligence in China
Chemicals US59m Advisor on proposed acquisition of a division of a UK plastics and specialty chemical producer
Chemicals US52m Advisor on China strategy and advisor on acquisition
Wassall
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????? IR

• Why business
• Why corporate
• Why public corporate
• How to realize the profit from public corporate
• Dividend, trading for capital gain, MA for
  capital gain, etc
• Corporate Finance
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• IR Investor Relations

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IR _ Key concept

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IR _ ??? IR ??

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IR _ ??? IR ??

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IR _??????? ?? ??
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IR _ IR ? ??

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IR _ IR ? ??

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• 2? Audience Opinion leaders (Media)
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IR IR ? PR
IR PR
Target Audience Current potential Investors Consumer Media
Information Type Voluntary, on time, consistent Strategic limited
Information Contents About the company and its future Positive information only
Result on information Market Consumer
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IR IR ? ???

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IR IR ? ??? 2

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• ?? ????? ?? ?? ? CEO? ??????
• ?????? ????
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• KTG ? ???
• SK? ???
• ???? ? Elliott Hermes
• ??? ?? (Lazard Asset Management)

• ??? ?????? ??? ???? ????
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IR _ ?????? IR

• Corporate Governance Fund in Korea
• Since Asian Crisis, corporate governance issue is
  one of the most important investment themes in
  Korea
• Following Sovereigns success in dealing with SK
  Group, Korea is being highlighted as one of the
  lucrative target countries of Corporate
  Governance Funds
• Corporate Governance Funds are usually investing
  in a company with poor governance in either
  friendly or hostile way, and improve the targets
  governance function. This activity eventually
  improves targets share price and thus make
  profits.
• Hermes, Sovereign, Oppenheimer and BDAs client

• Corporate Governance Fund Client
• UK based private equity firm with more than 20
  years operation history
• Fund size over 4bn (Close-end form)
• Head Office New York, London (London takes all
  international activities, Hong Kong is regional
  head office in Asia)
• Investment Process Select companies with
  governance problem gt take meaningful stakes
  (over 5) gt reform governance structure gt boost
  share price
• Activities in Korea Investment in Chaebol
  affiliates or other companies with poor corporate
  governance

• Investment Case 1
• Governance Issues Target acts as an holding
  company in a Chaebol group, and holds huge
  valuable assets just for controlling purpose.
  Accordingly, the value of investment assets are
  bigger than the companys market cap.
• Investments Our client invested in the company
  (around 5), and is asking governance reform
  together with other foreign minority stake
  holders
• Comments Korean Chaebol companies has various
  protection method against foreigners requests,
  but tends to accept the reform plan partially
  (share price improved)

• Investment Case 2
• Governance Issues Target company has huge
  amount of cash equivalents in hand, but does
  not have any fixed new business ideas. Target
  does not even deny cash dividend to shareholders
• Investments Our client invested in the company
  (minority stake), and will probably ask for cash
  dividend
• Comments Targets major shareholders already
  takes over 35, and affiliated persons and family
  members holds more than 15. Including treasury
  stock, the company has full control of the
  company, but started to consider higher cash
  dividends with our client request

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????? IR
End of Week 1