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SUPERYACHTS

INVESTMENT OPPORTUNITY

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NWYGENERAL INFORMATION

• North Wind Yard (“NWY” or the Company”) is a leading manufacturer of bespoke sailing and motor yachts. The Company started production some 37 years ago and has constructed over 600 yachts during these years, most of which represent today’s top vessels in the

Spanish yacht market.

• Since 2008, based on its well established and international reputation, the business has

refocused its strategy, aiming to consolidate its position into the SuperYacht market segment (from 30 meters to 60 meters).

• The company owns a concession in the Port of Barcelona’s main entrance, in a strategic and one-of-a-kind-location. This is currently valued at 7.5 MM€ with 14 years left on the current concession, which is extendable beyond 2024. Over 4.5 MM€ have been invested in new state-of-the-art hangers and equipment, providing a fully authorized shipyard and repair

and refit (“R&R”) facilities.

• NWY has a well established international reputation (particularly within sailing boats) and

the Company wants to leverage on that recognition and on its new brand new facilities to drive growth in the highly profitable SuperYacht segment.

• The yard is currently engaged in three businesses:

- SuperYacht construction (new builds – Custom Line).- Repair and Refit (R&R).

- Brokerage.

Content:

General Info. (Pag.2)

Business (Pag.4)

Market (Pag.6)

Value (Pag.2)

Financial Data (Pag.11)

Clients (Pag.10)

Opportunity (Pag.11)

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New Built.

• Client portfolio is stable in new builds’, however there is scope to improve backlog levels (conscious of capacity constraints) by forming new JVs with leading naval designers and brokerage firms (this has been a key area of focus by the CEO).

- Historically, 50% of new builds came from national clients and 50% from foreign (with Italy, France, England, Germany

and USA the main clientele nationality)- NWY is currently building the largest private yacht ever built in Spain, a 45 meter steel motor yacht.

- NWY does not takes on any inventory risk and works together yacht owners to provide the best quality of service.

• In the R&R division, the client portfolio is very solid with the

leading national entrepreneurs being the main clients, with the length of the yachts serviced principally between 20 meters to 35 meters.

- R&R clients and existing yacht/boat owners are more likely to be future clients for new builds.- R&R provides stable cash flow stream that supports day-to-

day operations of the business.

• Brokerage division has been running for the last 6 years and we envisage an aggressive re-positioning of this division to ensure success

in today’s competitive market.

• The Yard has no direct employees; the subcontracting policy

implemented 3 years ago permits flexibility for this new project. The subcontractor’s employees are top experienced and qualified personnel in the yachting industry. The main directors of these

subcontractors (with more than 30 years purely dedicated in private yachts new builds) are aware of this new project of the Yard and willing to establish a business relation.

NWY

Business Structure

NWY

New Builds

R&R

Brokerage

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NWYBUSINESS ACTIVITY / MANAGEMENT’S PLAN

New Built division:

• The yard’s strategy is to consolidate the business into the SuperYacht market segment where its location and business model give the Yard a competitive edge.

• All the contracts are pre-order; no new built is done without having been sold.

• In the last 2 years, the Company has built 2 super yachts, a 30 meter and 45 meter luxury steel motor yachts.

• Partnership with the top Spanish engineering firm Isonaval (www.isonaval.net) for the last 5 years, working together on more than 15 projects.

• The Yard offers the best service to clients in partnership with top yacht consulting firms (project managers), SuperYacht brokerage firms (sales force) and naval architects / designers of “Superyachts”. Together, with the quality of the workmanship and the yard’s location makes it a first choice for ship-owners.

• Net income for a new built project represents 25% of sales.

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Repair and Refit division:

• The Yard has a solid client portfolio which generates over 3 MM € in sales per year, with over

300 yachts of average length between 20 and 35 meters serviced per year.

• The Yard is currently working in two larger refits valued at over 700.000€.

• All R&R work is subcontracted to specialized companies.

• Net income represents 25% of sales.

Brokerage:

• Recent initiatives put in place, due to competition in this market and based on a strategy to

take advantage of the yards facilities, the company has launched a new project named Outlet-Yachts which aims to sell yachts seized by banks under an exclusive, world wide competitive bidding process.

• The company offers the banks free storage and maintenance in the heart of Barcelona (permanent show-room) and a proactive sales management through more than 50 dealers worldwide and in partnership with the top Spanish yacht brokerage website www.cosasdebarcos.com.

•The project focuses its efforts on yachts with a market value of over 600.000€.

•Net income is total sales (commissions) less the commissions to the sales force, this makes and average of 6% over the yacht price.

Divisions

The three divisions of the yard are managed

independently but enjoy commercial

synergies between them, e.g. R&R

clients are potential New Build or

Brokerage clients and vice-versa.

The main division is the New Built

which represents more than 50% of

the total sales, R&R is the second

contributor by sales, amounting for

35% and brokerage commissions

account for 15%

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NWYMarket Analysis

• The global financial crisis has had a negative impact on the yacht industry, particularly semi-custom new builds but also R&R activity. However, the SuperYacht sector has experienced a 36% upside in the first 4 months of the year 2010 compare to the same period in 2009. The total amount of superyachts sales in these 4 months was over 253 MM€.

• In the growth years leading up to the crisis, most yards (including North Wind) had made significant investments which the turndown in sales made exceedingly difficult to pay off.

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The SuperYacht sector has experienced a 36%

upside in the first 4 months of the year 2010

compare to the same period in 2009.

There is an important market for used boats, particularly in yachts under 25 meters.

NWY

• There is an important market for used boats, particularly in yachts under 25 meters. In this segment of the market, New Builds are suffering badly due to the surplus offer. However, the SuperYacht market has suffered less due to the typical client

profile in this sector, wealthy individuals who want unique yachts for an investment of 20 MM€ and where a “used” yacht will often not do unless extensively rebuilt to the new owner’s

specifications.

• The brokerage market is very active in these days. The

Company business model benefits from banks incentive to materialize the sale of repossessed yachts as quickly as possible, with the majority of times accepting offers below asset value, this increases the churn the success ratio for the company.

New Builds are suffering badly due to the surplus offer. However, the SuperYacht market has suffered less due to the typical client profile in this sector, wealthy individuals who want unique yachts for an investment of 20 MM€

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NWYValue Proposition

Nautical Cluster in Barcelona:• The company works with top qualified providers for materials and a subcontracting workforce for more than 30 years. This allows the company to implement a high ratio of subcontracting in every project.

• Quality works building the most important superyachts in Spain.• Competitive man hour cost versus other shipyards in the north of Europe: 30% below average in the industry.

Strategic location• The shipyard is right in Barcelona’s Port entrance: forced passage for yachts entering Barcelona’s Port.

• Surrounded by Yacht Clubs (more than 800 yachts) and next to Marina Barcelona 92 (top refit SuperYacht facility).

Attractive location• Comfort: Key personnel involved in a long term project (between 1 to 2

years duration). Barcelona and its infrastructure offer an added value to a long term project. Project managers, captains and ship-owners will weight the option of Barcelona as a key factor in the decision making process to

choose where to be built the project. • 10 minutes form Barcelona International Airport – Ideal for active

monitoring of the

construction process, which is key element of the ownership experience.

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NWY

Image• 250 MM€ investment in the last 2 years in the surroundings of the shipyard (“W” Sail Hotel, new marina, etc.)• The shipyard is five minutes away from the city centre and

is visible from nearly any part of the city.

Facilities:• Over 4.5 MM€ invested in works done on the hangers over

2 years ago.

A modern look at Barcelona’s Harbor entry

Actual hangars and R&R facilities area

Located at Barcelona’s Port, right by the main entrance

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NWYClients

New Builds:

- The target clients are High Net Worth Individuals worldwide.

- Historically, 50% of the shipyard’s new builds are for foreign

clients.

Repair and Refit:

- Solid base of national clients with yachts moored in Catalunya

and Valencia (most of them successful business entrepreneurs).

- The shipyard is the only specialized centre in the area for

yachts between 20 to 30 meters. The location close to the

marinas where the yachts are moored is a comfort for the clients.

Brokerage:

- The target client are mainly European High Net Worth

Individuals.

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NWYInvestment Opportunity

• The company is looking for a partnership for a capital raise to acquire a significant stake.

• The project is a unique opportunity to consolidate the shipyard as one of the top shipyards worldwide in the 30 meter to 60 meter superyachts niche.

• The investor will invest in a company with strong assets value, strong business divisions and significant upside potential.

• The strategy is to reduce and reorganise the company’s debt to a level where the adjacent divisions, R&R and Brokerage can pay for themselves leaving the main division, SuperYacht New Builds, for the

potential upside of the business. In order to do so, the proposed structure is:

- Leave the company debt in 4 MM€ to be paid in 12 years.

- Leave the company cash position to push the projects in 1 MM€

Financial Data

• Sales over 8 MM€ in 2009.

• Long / medium term financial debt of 5.5 MM€.

• Facilities: over 4.5 MM€ spend in the works done in the hangers over the last 2 years.

• Average cost for direct man hour: 20€ per hour.

• Average cost for direct subcontracted man hour: 23€ per hour.

• Average discount in materials and equipment: 25%.

• Sale price of men hour: 45€ per hour (depends on speciality).

• Average net income per project in New Builds and R&R: 25%.

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NWY

Barcelona’s Port Main Entrance

Real Club Marítimo de BarcelonaMarina Port Vell

Marina Barcelona 92Real Club Náutico de

Barcelona

BARCELONA

PORT

NORTHWIND

New Marina Barcelona

Hotel Vela. BCN

W Hotel BCN Already set

Location