Insolvency - an opportunity for the innovative entrepreneur

Ioana NeculaGeneral Director

5th of March, 2013

Key Issues

• Who we are?

• Short history of International Leasing

• International Leasing within sector trends

• Why International Leasing?

• Business model

• Current status and actions

• What we have learned

• Business Plan & Model

• Leasing Activity

• Distressed assets activity

2

WHO WE ARE?

3

Short History Of International Leasing

• Set-up in 1995 as the first independent leasing company

• Recognized by its competitors as a major trend setter

• Co-founder of the National Union of Romanian Leasing (UNSLR) now divided into ALB and ASRL

• First private company to issue public bonds (2000, 2002 and 2005 – successfully repaid)

• First private leasing company listed on the capital market (RASDAQ)

• 8.000 leasing contracts with over EUR 150 Mio

• Very good reputation in the market

• Specialized automotive and equipment financial leasing ticket size around EUR 30k

• 2011 developed a dedicated platform for distressed assets management

• 2011 - 2013 made several successful acquisitions of toxic portfolios.

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Team structureA team with over 15 years of leasing experienceAn enthusiastic and energetic team, ambitious to ensure the success of all complex projectsWe developed a strong working experience on leasing due diligence projects

All our senior team have an in-depth leasing knowledge and support the management in successfully taking over leasing portfoliosWe understand the particular risks of leasing transactions and how to shape our diligence approach to protect the Beneficiary’s interest

We have compelling and relevant sector expertise, being one of the first leasing companies set up in RomaniaBuilding sound partnerships based on professionalism, accountability and integrity

5

Leasing Sector Synopsis - Trends Evolution

Evolution of non performing leasing from total granted credit Source: ALB

* Criminal groups frauded the leasing sector; Financial market exposed to fraud lacking real forensic specialists at the time.

Economic downturn and fraud*

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International Leasing Within Sector Trends

International Leasing’s portfolio followed the trend of the overall market

* ITL financed only Q1 – Q3 (Q4 2010 – Q3 2011 = freezing period; reorganization procedure)** ITL restarted financing in Q4*** estimated figures

Source: ALB

ITL freezing period

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WHY INTERNATIONAL LEASING?

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Restructuring the Business

• Good bank / bad bank model was proposed by ITL (first time in Jan 2009!)

• Decision to declare insolvency took almost 18 months

– Creditors / banks’ consensus difficult to obtain

– Insolvency - the only viable solution

• Insolvency protected both the company and secured the creditors assets

• BCR as main creditor – critical role in restructuring International Leasing

• The insolvency procedure started in Oct 2010 !

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Restructuring the Business

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Restructuring the Business

Valuation and acquisitionof distress portfolios

OldCo – Bad Bank (ILB)

Assets realization

Toxic receivables recovery

NewCo – Good Bank (ILI)

Business origination

Underwriting

Monitoring and portfolio administration

Common management platform:-Top & middle management-Support functions (HR, IT, finance & accounting, logistics)

Integrated common support platform for two complementary businesses create the synergies for cost segregation and effectiveness.

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CURRENT STATUS AND ACTIONS

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What we have learned

• In difficult times for success to be achieved it is essential and critical to convince and to ensure the support of the creditor through strong entrepreneurial involvement and commitment

• Good business has to take advantage of the accumulated experience and continue on improved basis. Therefore the leasing activity remains the core business while capitalizing more on its potential.

• All experience and threats have a strong educative role and therefore new capabilities have been identified to suit the new trends. Developing the distressed assets managing platform is one of the positive results of our struggling experience along with improving the management skills.

• Actively adapting to the new economical reality and conditions is a must for the survival and a way to profitable opportunities.

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Business model designed to meet current market evolution

• Existence of a Healthy Leasing Company functioning on an improved basis

• Functioning Distress Assets Platform to take advantage of the growing market opportunity for distress

assets acquisition or management, which will also handle the default risk from leasing activity.

• International Leasing demonstrated a series of qualities that qualifies it for sustained growth: Significant mind share Young experienced and dynamic management team Proven dependable and flexible ERP system Constant string of innovative and profitable products Audited by a Big6 company Captive dealership network Trendo Automobile – Peugeot & Kia Recognized web domain www.leasing.ro Appropriate size to build on – not too small to be difficult and time-consuming to further develop; not

too large to be prohibitive to buy in One of the last independent Romanian leasing companies with sound reputation

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Leasing Strategy and comparative advantages

Leasing strategy

• Customer for life’ policy - steady and loyal client base

• Financing the client not the asset – adequate response to the client’s investment needs

• Rigorous selection of new clients based on improved risk and information analysis

• Complete services adapted to client need (using the ILB platform for non-financial services)

Our advantages

Ethical behavior

Viewed as a “partner” by customer

Organization’s sales force

Integrated technology platform

Competition is driving commodization - Product innovation

Product and service differentiation

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Portfolio Acquisition

• Volume of portfolio acquisition to date:

* Started late in 2011 (August).

** Transactions currently ongoing.

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Nominal value (EUR)

2011* - 2012 2013** Total Gross margin

Expected

Ongoing Portfolio

732,000 11,600,000 12,332,000 100%

Toxic Portfolio

8,116,000 15,000,000 23,116,000 300%

•Need for the banks to clean their portfolios – approx. 3 billion EUR nonperforming loans as per NBR statistics

•More owners and banks consider the alternative to sell toxic portfolios or externalize the administration of such portfolios

•To buy independent assets in distress and restructure credits for the Banks

•Lack of distress assets management capabilities and offers on the market (for leasing and legal entities segment)

Distressed assets - opportunities

Distressed assets strategy and comparative advantages

Distressed asset management strategy

• Building sound partnerships with banks and leasing companies to ensure constant distressed assets

acquisitions (distressed receivables and goods)

• Also looking on free market acquisitions from either individuals, auctions, liquidators, bailiffs or other

leasing companies (distressed goods)

• Developing a sound and tested network relationships with trustable and efficient bailiffs

• Developing non judiciary procedures in order to gain information and to seize an amiable profitable

solution

• Increasing business volumes to maximize profits

Our advantages

Profitable proven experience

Dedicated team with adapted skills and mind set

Ability to find solution and to set partnerships

Good reputation and trustable team

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Our Offer

In regards of the experience and the expertize, International Leasing has the capability to offer today the following services:

•Due diligence over existing portfolios

•Recovery of receivables and assets

•Liquidation of repossessed assets

•Management of repossessed goods in specialized parks (auto and equipment)

•Portfolio and/or repossessed stock acquisition

Contact

Thank you for your attention!

Ioana NECULA

Director General

 

Tel./Fax: +40 21 305 5150

Mobile: +40 722 556 565

E-mail: ioana.necula@leasing.ro

http://www.leasing.ro/