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Feasibility studies and Due Diligence investigations

Background
In both developed and developing economies around the world, the private sector is widely viewed as the engine for growth. In support of this initiative, Foreign Direct Investment is actively encouraged. However, prior to investing in a development opportunity in an emerging market/ transition economy (whether by way of equity acquisition or greenfield development), investors will often seek an independent opinion on the technical, market and financial viability of the proposed project. Similarly, where international debt financing is envisaged as part of the overall funding package, prospective lenders will often require an independent corroboration of the projects forecast ability to service its debt.

A selection of feasibility and Due Diligence assignments:


Tacis and Phare countries - lead firm in consortium awarded two 3 year framework contracts for the provision of market, financial, legal, industrial and environmental Due Diligence in advance of EBRD direct investments in pre- and postprivatisation SMEs in each region respectively. More than 120 call-offs (totalling some EUR 2.5 mill.) have been undertaken to date. Cyprus - feasibility study into the purchase of the State-owned oil refinery in, disassembly of the plant and shipment and re-assembly on a greenfield site in Iraq. Included a valuation of the plant as a basis for the clients financial offer to the Cyprus Government. Russia - market and financial Due Diligence in advance of a potential equity investment in a company specialising in the extrusion of polystyrene sheets for thermoforming packaging of foodstuffs. Ukraine - technical and financial Due Diligence into a start-up company planning to commercialise a liquid nitrogen gas refrigeration system, for use in refrigerated transport. Russia - full feasibility study into proposed greenfield development of an integrated vodka distillery, bottling and bottle manufacturing facility.

Armenia - technical and financial Due Diligence into proposed expansion of garments and textiles factory, focussing on the companys ability to compete in the European market. Kyrgyzstan - technical and financial Due Diligence on a proposed new housing complex focussed on the growing international expatriate community. Ukraine - technical and financial Due Diligence into glass factory in to provide EBRD with clear and professional judgement of commercial viability and risks of investment in this enterprise. Russia - technical and financial Due Diligence on automotive components factory, specialising in press-forms and dies. The assessment focussed in particular on identifying the risks of price transfers and asset stripping as well as evaluating projections based on product expansion. Bulgaria - technical Due Diligence on largest furniture manufacturer ahead of proposed equity investment with the aim of augmenting productive capacity. Macedonia - full Due Diligence for proposed equity investment in a Greek companys plans to develop an electrical distributor boards and fluorescent light fittings production facility on a greenfield site.

Our experience in undertaking feasibility studies and Due Diligence investigations


PKFs International Projects Group (IPG) has long-standing and extensive experience in undertaking such project evaluations and feasibility studies. By combining our in-house financial and analytical resources with expertise drawn from our extensive sub-contractor database, we are able rapidly to assemble multi-disciplinary teams able to provide independent expert advice on almost any project under consideration.

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Macedonia - comprehensive preassessment of a telephone call centre in preparation for EBRD equity investment in the enterprise. Turkmenistan - technical and financial assessment of a mens sock manufacturer, including Due Diligence on the projects sponsors in Italy and sister enterprises in Uzbekistan. Turkmenistan - technical Due Diligence on proposed equity investment in wool scouring plant, funding implementation of latest Swiss technology. Latvia - financial Due Diligence (including valuation of company applying a number of valuation methodologies) into third tier cargo and passenger aircraft operator in advance of potential equity investment by EBRD in the airline. Lithuania - financial Due Diligence into brewery and soft drink manufacturer, ahead of proposed EBRD equity investment in brewing company. Turkey - market, engineering, operational and financial Due Diligence study for proposed multi-million Dollar BOT funding of new international terminal at Atatrk International Airport. Qatar - feasibility studies for two proposed development projects, both designed to provide high-quality mediumto long-term residential accommodation for expatriates.

South Korea - feasibility study into the proposed US$ 300 mill. development of an exclusive leisure-based complex on Jeju Island, comprising a 36-hole world-class golf course, 5-star hotel with casino, and 450 villas and apartments. Tanzania - feasibility study for the establishment of a light aircraft service to provide tourist access to game parks. Belarus - financial, legal and environmental Due Diligence into ladies underwear manufacturer, focussing on its ability to expand into foreign markets. Uzbekistan - feasibility study for proposed investment in Turkish joint venture to establish refrigerator manufacturing plant, including market, technical and financial appraisal and assessment of projects ability to meet forecast EBRD and IFC debt-servicing requirements. Poland - initial appraisal of proposed Korean joint venture to establish TV and VCR manufacturing plant, including market, technical and financial evaluation and assessment of ability of project to meet forecast EBRD debt-servicing requirements. Lithuania - comprehensive Due Diligence into a leuko-sapphire mono-crystals facility. Kazakhstan - feasibility study for development of public transport monorail system for Almaty, to be operated on a

concession basis. Study reviewed routing issues, passenger demand and pricing structures, technology assessment and operations and management aspects. Nigeria - feasibility study into proposed 300m/t per day flour mill in Lagos. Latvia - financial Due Diligence into proposed expansion of manufacturer of plastic packaging, including IAS restatement of accounts and enterprise valuation. Bosnia - technical and environmental Due Diligence for proposed equity investment in a decorative stone processing company . Ukraine - comprehensive Due Diligence into proposed equity investment in a garment manufacturer, and in a company redeveloping and converting into offices a number of buildings owned by the manufacturer. China - feasibility study into proposed US$ 300 mill. development on green-field site in Beijing of a high-tech Science Park with associated hotel and villa complex. Lithuania - financial Due Diligence into a publisher of City Guides, with branch operations in six central and eastern European countries.

For more information on any of the above information, go on-line to www.pkf.co.uk/mcs or contact: Murray Ross Tel 020 7065 0000 Fax 020 7065 0295 E-mail murray.ross@uk.pkf.com PKF (UK) LLP, Farringdon Place, 20 Farringdon Road, London EC1M 3AP
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