Avallon

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The proposed project, Avallon MBO Fund (the “Fund”) is a specialised private equity fund with an objective to invest in small- and medium-sized companies through management or leveraged buyouts. The Fund will invest predominantly in Poland with up to 25% of investments in other new EU member states. The Fund will seek to acquire controlling interests in the target companies while investing its capital alongside the existing management teams. It is expected that an average size of the investments will be approximately Euro 5 million of equity and the transactions will usually be leveraged. The Fund will support the development of private companies in Poland and the region through operational and strategic restructuring as well as through expanding the use of management and leveraged buyouts to mid and small companies market. The transition impact of the proposed project will be most pronounced in the following three areas: 1) demonstrating that private equity funds are a sustainable form of financing for medium to small companies segment of the market 2) promotion and of MBO strategy amongst small and medium sized enterprises; 3) restructuring of investee companies resulting in profitability improvements; The Fund will be a Dutch limited partnership (commanditaire vennootschap) established by [Avallon General Partner], a private BV company incorporated in the Netherlands. The General Partner will appoint [Avallon Management Company] incorporated in Poland as an investment manager of the Fund. EBRD proposes to commit the lesser of EUR 12.0 million or one third of the total commitments at the first closing. Total fund size is estimated at Euro 50 million for the final closing. The first closing target is Euro 30 million. The Fund will be required to adopt and implement the EBRD’s Environmental Procedures for Funds which includes compliance with the EBRD’s Environmental Exclusion and Referral List and provision of an Annual Environmental Report. Investee companies will be required to comply, at a minimum, with national standards for environment, health, safety and labour. None. Mr. Tomasz Stamirowski, Managing Partner Avallon MBO Fund ul Piotrkowska 89 90-423 Lodz Poland Tel: +48 (42) 630 97 71 Fax: +48 (42) 630 97 75 Email: t.stamirowski@avallon.pl