arjan march 2015
TRANSCRIPT
Unlocking Value for Global Firms Seeking Entry into Iran
Private & Confidential March 2015
INDUSTRIAL | FINANCIAL | LEGAL
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Iran – the World’s Last Remaining Major Emerging Economy
Introduction
Iran is a physically imposing country greater than 1.6 million square kilometers in area and spanning five regions (Central Asia, the Caucasus, the Middle East, the Persian Gulf and South Asia), with a young, educated and consumerist population of 81 million
As the sanctions imposed on Iran begin to be lifted, global firms possessing capital, expertise and technology, are keen to enter the large and lucrative Iranian domestic market, which has been closed for decades
In Iran, business is conducted within three distinct economic sectors:
! Private ! Quasi-Private ! Public
Given the intricacies of these sectors and their respective market participants, global firms will often find themselves uninitiated and unequipped to operate successfully in Iran
Global firms seek out proprietary investment/commercial opportunities in Iran, on a turnkey basis, wrapped in industrial, financial and legal support
It is Arjan Capital’s strategic objective to facilitate the entry of global firms into Iran
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Arjan Capital is an independently owned and operated investment firm focusing on the Iranian markets
Arjan was founded by professionals and entrepreneurs who have worked and lived in Iran and educated and trained outside Iran
Arjan has three practice areas, offering a multi-discipline platform to foreign entities, seeking
entry into Iranian markets. Arjan’s multi-discipline platform consists of:
! Industrial practice ! Financial practice ! Legal practice
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Arjan Capital
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A Holistic & Turnkey Approach
PROJECT SUPPORT
NOMINEE SERVICES
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INDUSTRIAL
FINANCIAL
LEGAL
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Targeted Market Sectors
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Construction & Hospitality Manufacturing Retail and F& B (franchising)
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Targeted Market Sectors
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Oil Field Services Technology FMCG
Renewables (wind, solar, water)
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Targeted Market Sectors
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Listed Equities Financial Services
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Practice Areas
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INDUSTRIAL
PURPOSE: Identity and introduce viable projects to global firms (“sourcing projects”)
Technology & industrial knowhow and transfer through joint ventures, franchise & licensing,
assembling and distribution agreements
Market intelligence on opportunity (where, sector, size, sponsor)
Partner sourcing (identification, approaching and teaming up)
Industrial representations, opportunities and solutions
Barter transactions
Enhance brand awareness/name recognition Providing proprietary deal insight & knowledge of Iranian transactions
Post-transaction support
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FINANCIAL
PURPOSE: Closing transactions via “liquidity events” (buy, sell, recapitalizations, capital increase
& exchange listings) Mergers & acquisitions (M&A), recapitalizations
Capital raising (debt and equity) from private and public markets
Creating buyer/seller strategies, deal structuring & negotiation, valuations
Identifying, approaching and negotiating with sources of capital in Iran (and abroad, if required)
Assessing viability and suitability of relevant local funding partners (project sponsors, banks, investors, others)
Drafting pitch books, investor presentations, organizing, managing road shows, financial analysis
Facilitating access to global institutional investors, including private equity, with investment appetite in excess of €100 million
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LEGAL
Compliance & Due Diligence PURPOSE: Ensure compliance
with global sanctions regimes and avoidance of adverse impact on reputation and operations (“sanctions risk”, “client risk”)
Sanctions compliance management
Proactive defence against false sanctions allegations
“name clearance” under Specially
Designated Nationals list (“SDN”)
Legal Support
PURPOSE: Provide advice on optimal legal & tax structure
Legal entity formation, management & administration
Contract negotiations & management
Apply, negotiate and obtain Foreign Investment Promotion & Protection Act (FIPPA) license
Nominee and fiduciary services Post-transaction support
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Project Support
PURPOSE: Provide on-going support throughout a transaction’s lifecycle
Owner representative mandates through Nominee & Fiduciary services
Third party specialist identification, assessment and contracting (audit & tax firms, specialist
legal advice, market research)
Perform oversight of work streams produced by mandated third party specialists
Provide office infrastructure including premises, clerical, administrative, communication and IT support (the “Incubator” approach)
Provide business advisory and office support services including “concierge services”
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Representative Transactions
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Challenge Solution
How to secure permits for wind farms (Acquisition of licenses for 4x100 wind farms across Iran)
! Local investment partner with access to government
! We delivered what we promised
Financing: How to import funds
How to finance capital expenditures (CAPEX)
! FIPPA license to protect importation of equity from inflation and political risk
! Government offers 80% of loans for renewable energy at 7.5%
! Identified access to international institutional investors with Iran appetite
Hardware & Technology:
Importation strategy
! Identified German wind technology with direct support from German technology provider whom we represent in Iran
Local assembly strategy ! Identified local partners to assemble product locally avoiding transport cost
Wind Farm Joint Venture
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Challenge Solution
How to penetrate the Iranian market as part of the French dairy manufacturer, Groupe Bel’s expansion strategy into Iran
! Identified six potential joint venture partners ! Conducted a ranking of the six ! Advised, negotiated & closed the JV between
Groupe Bel and Iranian dairy manufacturer
JV funding: How to import funds?
How to finance CAPEX?
! Obtained FIPPA license to protect importation of equity from political risk (expropriation and repatriation)
! Cash contribution from Bel ! Cash-in-kind (equipment) contribution from the
Iranian side
Due diligence & market risk ! Managed due diligence (audit and tax) ! Performed market study on the white cheese ! Conducted commercial due diligence
Legal ! Drafted shareholders’ agreement ! Structured call options, drag along rights ! Negotiated & obtained board majority control
for Bel
Dairy Manufacturer Joint Venture
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Challenge Solution
How to integrate hotel design, construction, management and financing issues into a viable business model
! Identify the right project sponsor ! Identify the right designer ! Identify the right hotel management with
the right “brand” ! Make the project “bankable” with optimal capital
structure (debt & equity)
Financing: How to raise the right amount of debt
How to ensure that the hotel’s operating cash flow would service the debt
! Canvass willing lenders for pricing and tenor ! Form a “club deal” with interested lenders ! Cash flow modeling to ensure that the operating
profit generates enough cash to service debt
Branding: How to select the right hotel operator (branding)
! Identified reputable operators of five star hotels ! Negotiated the hotel management agreement (HMA) ! Agreed with the operator on key performance
indicators as part of the HMA (ADR, RevPar, occupancy, maintenance capex)
How to marry the hotel design with the hotel “economics”
! Ensured that the hotel design and layout optimized cash generation
Five Star Hotel
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Wind Power &Technology
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Road Safety Equipment & Lighting Hospitality
Financial Services Automotive & Rail; Power Generation Construction
Representative Industries
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Representative Industries
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Branded Consumer Goods & Franchising
The Arjan Team
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Team comprised of experienced Western-educated and trained investment bankers, industrialists and lawyers (IMD, Chicago, Harvard, Lausanne, Wharton)
Persian, French, English, German, Spanish, Italian & Arabic speaking
Extensive network in Iran, Europe, the Gulf Cooperation Council (GCC) and the US
Track record in manufacturing, wind energy, oil & gas, hotels, cement, banking, brokerage, trade finance and law
Over 80-years of combined global experience (North America, Europe, GCC & Iran, at senior levels)
The Team
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A Swiss national, Mr. Schweitzer is a CEO with expertise in start ups, SME’s and frontier markets business development, Mr. Schweitzer has lead IPO processes across renewable energy and innovative technologies sectors. Experienced in identifying market opportunities, Mr. Schweitzer has a strong focus on capital raising, business development and exit strategies. Mr. Schweitzer serves as an advisor to the trade and commodity division of Metallco International Ltd, a 40-year-old industrial merchant company specializing in automotive/rail, power generation, offset- and counter trade. Since 2009, Mr. Schweitzer has had an active presence in Iran, advising international industrial and investment companies targeting the Iranian market, as well as facilitating sanctions-compliant industrial and commercial activity. Mr. Schweitzer is a member of a Swiss-Iranian investor group that procured licenses for wind farms in Iran. In 2004, Mr. Schweitzer co-founded a company that developed a hydro-electronic power drive systems for mid-sized, on- and off-grid wind turbines. Previously, Mr. Schweitzer created and managed a US$ 200 million market-timing fund; and has held management positions at Jacobs Suchard (now Kraft Foods Schweiz AG), in France, Panama, Switzerland, India and the UK. Mr. Schweitzer has been a founding partner of startups and served in executive roles in international banks European asset management firms including A. Sarasin & Cie (1980-1983) Jacobs Suchard AG(1984-90) and Kenk & Schweitzer Associés (1990-1994). Mr. Schweitzer serves on a number of SME boards of directors and is actively involved in the Young Presidents’ Organization (YPO).
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Andreas Schweitzer – Senior Managing Partner EDUCATION IMD, Lausanne, Switzerland 1996 London School of Economics ESC, Neuchatel, Switzerland
PROFESSIONAL MEMBERSHIPS Young Presidents’ Organisation (YPO) Member, Strategic Committee YPO Doing Business Globally Network YPO Doing Business in Iran Network Founder & Chairman, YPO Renewable Energy Network
BOARD MEMBERSHIPS Bourne Park Capital, London Acquarmarine Fund, Zürich Other SME Board Memberships
LANGUAGES German, French, English, Spanish, working knowledge of Italian
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A native of Iran, Mr. Gilani is an investment banker with a strategic geo-political perspective on the countries sharing the Persian Gulf--Iran and its GCC Arab neighbors plus Iraq. This perspective was formed as a result of having worked on both sides of the Persian Gulf in sectors such as banking, real estate (hospitality), mining, executive aviation, consumer goods (FMCG) and manufacturing. Before co-founding Arjan Capital, Mr Gilani was the Managing Director, Investment Banking Group, National Bank of Abu Dhabi (NBAD), the United Arab Emirates’ largest bank. Under Mr. Gilani’s leadership, the investment banking team advised clients on mandates from corporate finance and project finance to initial pubic offerings (IPOs) and was awarded the Best Investment Bank, UAE in 2013, 2012 and 2011. Prior to joining NBAD in 2009, Mr. Gilani had been an Executive Director at AB Capital, Arab Bank Plc’s investment banking subsidiary, based in Dubai International Financial Centre (DIFC). In 2005, Mr. Gilani and his family moved to Iran, heading the Tehran office of Swicorp a Geneva-based investment banking firm. While based in Iran, Mr. Gilani sourced private equity and advisory transactions for Swicorp’s clients, including the the Savola Group, Saudi Arabia’s leading non-energy industrial group and Groupe Bel, a leading French dairy products manufacturer. Mr. Gilani started his investment banking career at Kidder, Peabody & Co in New York City as a high yield bond analyst. Later, he was a senior buy-side investments executive at the New York family investment office of Stavros Niarchos. Subsequently, Mr. Gilani was an M & A banker advising US and Canadian mid-market companies based in California. A seasoned banker, Mr. Gilani worked in a variety of roles with a global bank in Karachi, Luxembourg, Hong Kong, Toronto and London.
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Nicholas M. Gilani – Senior Partner
EDUCATION MBA (finance, real estate), 1994 The Wharton School University of Pennsylvania MA (Middle Eastern Studies), 1984 Center for Middle Eastern Studies The University of Chicago BA (Political Science), 1982 University of Illinois AWARDS “Best Local UAE Investment Bank” 2013, 2012 and 2011 by EMEA Finance MEMBERSHIPS The Atlantic Council Washington, D.C. LANGUAGES English, Persian, working knowledge of Arabic
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Since 1994, Dr. Akhlaghi has specialized as corporate counsel to international technology, real estate, technology, oil & gas and stock brokerage companies and has extensive experience structuring and negotiating complex corporate transactions including acquisitions, asset purchase and other partnering agreements including joint ventures involving cross-border transactions. Dr. Akhlaghi has advised corporate executives on matters ranging from commercial transactions to internal employment policies and regulatory matters. She advises on all phases of formation, promotion and operation of corporates entities & structures. During her 20-year legal practice, Dr. Akhlaghi’s clients have included multi-national conglomerates headquartered in the United States and national governments including that of Iran. Dr. Akhlaghi has extensive experience in conducting complex litigation involving commercial disputes in California courts and has advised on international arbitrations under ICC, LCIA, AAA and Swiss Arbitration Rules in worldwide tribunals including the Permanent Court of Arbitration, the Hague, the Netherlands. At Harvard Law School, Dr. Akhlaghi organized the first Harvard symposium on law and business, a conference covering law and doing business in various countries around the world that included the participation of World Bank executives and top ranking international lawyers. Dr. Akhlaghi was trained by the late Professor Roger Fisher at the Harvard Center for Conflict Management. As Adjunct Professor of Law, Dr. Akhlaghi has taught courses in Remedies (contracts and torts) as well as contract negotiations and client-centered counseling.
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Dr. Holly H. Akhlgahi – Senior Legal Counsel
EDUCATION LLM, 1993 Harvard Law School Member, Harvard International Law Journal Member, International Law Society Assistant, Professor von Mehren, International Arbitration Juris Doctor, 1992 Whittier Law School, California Whittier Law Review, Articles Editor BA, Cum Laude (Languages), 1996 California Lutheran University
PROFESSIONAL MEMBERSHIPS Member, California Bar, 1992 Member, Washington D.C. Bar, 1996
PUBLICATIONS Note, Idaho v. Wright: The Right to Confrontations under the Sixth Amendment to the United States Constitution, 13 Whittier L. Rev., 489 (1992)
LANGUAGES English, Persian, French, working knowledge of Spanish and Arabic
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Adib Tohme is an international tax and corporate lawyer and an international economist. He specializes in Corporate reorganisations and restructurings and commercial transactions, including domestic and cross-border mergers & acquisitions, demergers, capital raising, joint ventures, tax efficient holding company and financing structures and permanent establishment issues. As a Capital Markets specialist, Mr. Tohme advises on a full range of transactions including Islamic finance, debt capital markets, derivatives, equity, markets, securitisations, structured finance. Mr. Tohme’s practice includes advice to private equity and hedge funds on corporate governance and international taxation matters. Mr. Tohme has written and lectured extensively on a broad range of legal, financial, tax and macroeconomic issues including international law, taxation and economics, the determinants of competitiveness, national economic models, foreign direct investment and reform issues in Middle Eastern economies, sovereign debt restructuring, and the role of corporate governance in promoting growth. Mr. Tohme is the co-founder and former dean of the Anglo-Saxon faculty of Law at La Sagesse University, Lebanon and a visiting researcher and scholar at Harvard Law School. He is also a Professor of Law and lecturer in International Economics. Mr. Tohme is a founder of the Middle East Law Group and the Middle East Law Journal, a consultancy group and publication specializing in law, economics and finance. Mr. Tohme acted as a counselor to the UNCTAD on foreign direct investments in Arab countries and advised multinational clients in Paris, London, Eastern Europe, New York and the GCC on international taxation, corporate law, capital markets and global finance.
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Adib Tohme – Senior Legal Counsel
EDUCATION MBA, 2000 ESCP-EAP, France Visiting Scholar, Harvard Law School, 1994 LL.M, 1993 Harvard Law School DESS (Business Law and Taxation), 1992 University of Pantheon- Assas, Paris Masters in Business Law and Taxation, 1991 University of Pantheon- Assas, Paris LL.B, 1990 Saint-Joseph University, Beirut,
PROFESSIONAL MEMBERSHIPS Member, Beirut Bar, 1994 Member, New York Bar, 1994
LANGUAGES Arabic, English & French
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Contacts
Nicholas M. Gilani Senior Partner
Andreas Schweitzer Senior Managing Partner
Telephones: +98 933 731 58 57 (Iran)
+41 79 211 65 60 (Switzerland) Email:
www.arjan.capital
Telephones: +98 912 495 0572 (Iran) +971 50 342 3430 (UAE)
Email:
www.arjan.capital
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The material contained in this document are i l lustrative and purely for discussion purposes and do not represent any binding obligation or commitment by Arjan Capital. Arjan Capital does not make any representation as to the completeness of this document and assumes no l iabil i ty for losses arising from the use hereof. This document does not constitute an offer or invitation to enter into any type of f inancial transaction. It may not be reproduced either in whole or in part, without the written permission of Arjan Capital. The activit ies of Arjan Capital are wholly sanctions compliant and Arjan Capital does not engage in any activity that is prohibited by any and all sanctions regimes relating to Iran. This document is confidential and proprietary. It may not be transmitted to any person other than the original recipient to whom it was delivered by Arjan Capital.
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Disclaimer
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