Title here. Structuring. Right Deal. Additional information in Univers 45 Light 12pt on 16pt leading. kpmg.com

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1 SECTORS ADVISORY AND THEMES SERVICES Structuring Title here the Right Deal Additional information in Univers 45 Light 12pt on 16pt leading kpmg.com Credits and authors in Univers 45 Light 16pt on 16pt leading

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3 Structuring the Right Deal 03 Structuring the Right Deal The turmoil in the markets caused by the Eurozone debt crisis is the latest manifestation of the banking crisis that almost brought the global economy to its knees in Unlike then, however, it is now the interconnection between government debt and the banking sector destabilising the markets. Breaking this link is key. Since the crisis, the focus has been on strengthening regulation of the banking sector. Banking Union is the key policy priority at present, but high capital, more liquidity and de-risking the derivatives market remain key policy targets. The result of the above has had its abrupt impact on the local economy and on a further level on business confidence. Organizations look to re-strategize in an attempt to adapt to the current market conditions and find stability despite the precarious market environment. This can be achieved amongst other initiatives, such as achieving the appropriate funding, through mergers and acquisitions or disposals of various business sectors. Organizations are encouraged to find trusted and reliable advisors that could help them to get to results quickly and with increased confidence. Our Transactions & Restructuring Services department offers integrated solutions that help to maximize shareholders value in a complex and fast changing environment. Our Advisory Services combine the industry specialization and expertise from the various multidisciplinary sub-departments in order to support and supplement a wide range of services. INTRODUCTION Even in challenging economic times, business leaders need to consider transactions as a means of renewing and transforming their enterprises. High quality, professional advice assists companies to complete successful transactions that can result from clear-eyed analysis, strategic focus and disciplined execution. It is where KPMG s Advisory professionals can make a difference. Our professionals can assist clients in successfully completing transactions including mergers & acquisitions, joint ventures, disposals and de-mergers, privatizations, IPO s, etc. KPMG s Transactions & Restructuring Services can be distinguished by our research and understanding of how deals can create and reduce value, and our ability to deploy this in-depth knowledge to your advantage. HOW WE CAN HELP Our services help our clients when they are buying, selling, or raising finance by providing assistance throughout the deal - pre deal, during the deal, and post deal.

4 04 Structuring the Right Deal Assisting with Acquisitions We aim to help you get the deal you want by: 1. Focusing on an appropriate deal At an early stage, we work with you to evaluate your options, identify deal breakers, evaluate potential synergies and use our experience to highlight issues thus helping you to limit the time and costs spent on deals that may not work. 2. Understanding the opportunities and the risks We provide efficient and focused due diligence to help you understand the value drivers and highlight possible opportunities and risks. We can communicate clearly with stakeholders and assist with meeting regulatory requirements, providing the independent assurance and credibility you require internally and externally. 3. Deciding on price paid and increasing returns We can advise and help you implement an effective accounting, tax and deal structure. We can perform an indicative valuation, identify any pricing adjustments and provide you with the ammunition to negotiate, structure the deal effectively and fight you corner on sales and purchase agreement and completion accounts. 4. Delivering value as quickly as possible We can work with you to rapidly gain control and integrate the business by assessing actions required to protect value post completion and implement the integration plan successfully.

5 Structuring the Right Deal 05 Assisting with Disposals We aim to assist you achieve the disposal you want by: 1. Improving the value of bids submitted Through our experience of working with buyers, reviewing your disposal options, and assisting in preparing the business for sale, we can help increase bidder interest by identifying information required that assist bidders in fully valuing the opportunities. 2. Selling at the right price We can perform a valuation exercise to determine the minimum value you would feel comfortable in selling. 3. Limiting value leakage to completion We can help you avoid nasty surprises and price chipping by subjecting key information to detailed due diligence, and addressing communication of critical deal issues early in the process. 4. Maintaining value post completion We can negotiate on your behalf on the financial and accounting aspects of the sale and purchase agreement, and help prevent value leaking away through completion accounts. We can advise and help you implement an effective accounting, tax and deal structure. We work with you to ensure a clean separation with appropriately structured and priced ongoing service level agreements. 5. Limiting disruption to the transaction process and your business We can assist you in keeping tight control of the process, help limit purchaser interference with your business, and help keep the timetable on track.

6 06 Structuring the Right Deal Assisting with Deal Finance We aim to help you achieve an appropriate funding structure by: 1. Achieving a financing structure aligned to your interests We can provide independent and impartial advice on financing options. We highlight the value drivers, risks and sensitivities, enabling potential funders to validate the proposition. 2. Limiting cost of finance We can provide efficient and focused due diligence which helps you to understand, model and stress test the value drivers, opportunities and risks of the proposed financing. Our experienced professionals can evaluate and benchmark existing finance, and advise on refinancing and new debt options. 3. Increasing usable free cash flow Using our cash management experience, we can assist in designing and implementing systems to help you manage and monitor ongoing finance requirements, and increase available free cash flow. Through re-organising accounting and tax structuring, we work with you to reduce taxation charges and improve the potential realization of free cash flow. 4. Providing the credibility of independent due diligence We provide independent advice and due diligence giving the credibility required by your board and finance providers.

7 Structuring the Right Deal 07 Assisting with Raising Capital We aim to help you achieve an appropriate funding by: 1. Providing assistance during the listing process We perform a comprehensive IPO readiness assessment to identify your needs and any gaps, and provide actionable recommendations to support the IPO process efficiently and cost effectively. KPMG s IPO-readiness assessment framework will help you assess your company s readiness for IPO and help prioritize actions in the run up to your IPO. Our professionals can assist in optimising the tax structure of the company or group, even before the IPO has started, by providing their insight as to the most efficient structuring of the company. Our experienced team has excellent practicing knowledge of the application of the International Financial Reporting Standards (IFRSs) and International Standards on Auditing (ISAs), which are key requirements for the preparation of the Accountants / Auditors Report, by most Stock Exchanges, globally. In addition, through our network we can help in preparation of Accountants /Auditors Reports under accounting and auditing standards that are specifically required by a Stock Exchange. Moreover, our professionals can assist in the Review of Interim Financial Statements, based also on the application of the relevant standards, and also in the issue of compilation reports on Pro-forma Financial Statements, where such requirement exists. Based on our role as auditors/ reporting accountants (as relevant), we shall be required to issue consent letters and/or other comfort letters, which are based on the work we have performed. Moreover, depending on the various circumstances we may be required to produce private reports to the company and bankers, including: Long Form report and Financial Reporting Procedures report, and Working Capital report. We can Support on the day after to meet the regulatory reporting requirements and quality standards of a publicly listed company. 2. Advising on alternative funding solutions We can analyse all funding options applicable to your needs and advise on the optimal solution. Assist you in drafting debt security agreements and managing the process in concluding with potential interested investors.

8 08 Structuring the Right Deal Our Services KPMG s professional assistance and our value-driven approach can increase the probability of success, helping you identify opportunities and obstacles to realize value from transactions. With advice tailored to your needs, the transaction and the sector, we can assist across the entire transaction cycle or in one particular role, from predeal evaluation through negotiation and completion, to post-deal or separation. We invest in long-term client relationships and we bring you robust views, focusing on your key strategic and commercial drivers, and on value creation opportunities. The services provided by our Transactions & Restructuring team of professionals in KPMG Cyprus include: 1. Pre-deal evaluation and Bid services We provide assistance in pre-deal evaluation that is used in public takeovers, mergers, benchmarking, private acquisitions and potential disposals. Pre deal evaluation involves an initial assessment without access to the relevant business. We provide support during the Bidding process on public transactions. 2. Transaction Evaluation (due diligence) In order to help ensure the success of an acquisition, it is imperative that an appropriate evaluation of the risks and benefits of the proposed transaction is undertaken. We help assess the key issues facing the business and the drivers behind maintainable profits and cash flows by commercial analysis of relationships and operations market studies. We provide an investigative analysis of a business, typically including results/projections, tax, cash flows, commercial issues, management information, systems and controls, pensions, compensation, benefits, legal issues and environmental matters. 3. M&A Assistance Through our sell/buy side assistance we are able to guide companies throughout the entire buy/sell process. What s more, through our vast, network which we have built over the years, we can help companies identify potential investors/sellers or raise the necessary capital to complete an acquisition. 4. Valuation Similarly, our valuation exercises help companies place a value on their assets. Through sophisticated techniques we help companies decide whether to buy or sell and at what price. 5. Structuring advice We assist with the creation of efficient deal structures and optimizing the tax, accounting, commercial and legal position. 6. Debt and Equity financing Financing advice to borrowers in relation to developing and executing financing strategies and transactions across the full spectrum of debt products. This includes: financing options and capital structure reviews; bank and capital market financing transactions (including loans, bonds and private placements); leveraged or acquisition financing (include staple financings); structured and asset based financing, including securitization; real estate debt financing (including debt element of sale and leaseback transactions, OpCo/PropCo structures); Advising borrowers in debt restructuring/renegotiation (including covenant negotiations) of debt facilities with lenders/investors. 7. Integration / Separation We help to identify and assess synergies and separation issues. 8. Vendor assistance We assist with carve-outs, information memoranda, answer purchaser queries, undertake vendor due diligence and perform independent business reviews. We can act as administrators of a data room (virtual or physical). Data rooms are used in transactions where the vendor wishes to disclose a large amount of confidential data to proposed bidders, typically during the due diligence process. We provide advice on sale and purchase agreement. We undertake objective Vendor Due Diligence (VDD) exercises, initiated by a seller to assist with its proposed sale of a business, recognizing that our duty of care is owed to potential purchasers, and that our report will be addressed to the ultimate purchaser. 9. Contract assistance We provide support during the negotiation and completion phases of the deal, advising on: Scope of warranties and indemnities; Price adjustment mechanisms; Contract drafting;

9 Structuring the Right Deal Regulatory reporting for acquisitions according to the relative effective legislation We assist in preparing relevant submissions. 11. IPO services We can: perform an IPO readiness assessment; assist in optimising the tax structure of the company or group; assist in the Review of Interim Financial Statements, and also in the issue of compilation reports on Proforma Financial Statements; issue consent letters and/or other comfort letters; produce private reports to the company and bankers;

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11 Main Contacts Structuring the Right Deal 11 Christos V. Vasiliou Board Member Head of Advisory T: E: Christophoros P. Anayiotos Board Member Head of Transactions & Restructuring Services T: E: Constantinos Christodoulou Senior Manager Transactions & Restructuring Services T: E: Callia Michaelides Senior Manager Transactions & Restructuring Services T: E:

12 KPMG in Cyprus contact details: Nicosia T: F: E: Limassol T: F: E: Larnaca T: F: E: Paralimni T: F: E: Paphos T: F: E: Polis Chrysochous T: F: E: KPMG Limited, a Cyprus limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ( KPMG International ), a Swiss entity. All rights reserved. Printed in Cyprus. KPMG and the KPMG logo are registered trademarks of KPMG International Cooperative ( KPMG International ) a Swiss entity. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation. The views and opinions expressed herein are those of the author and do not necessarily represent the views and opinions of KPMG International Cooperative ( KPMG International ) or KPMG member firms