Presentation of the Central America Small

Enterprise Investment

Fund´s experience

Buenos Aires, Argentine Oct 21, 2005

Management company

ContentsContents

Financial results Financial results

ofof CASEIF/LIM CASEIF/LIM

Financial results Financial results

ofof CASEIF/LIM CASEIF/LIM

Summary of Summary of CASEIF CASEIF

andandLIM LIM

Summary of Summary of CASEIF CASEIF

andandLIM LIM

Success factors Success factors

of of CASEIFCASEIF

andandLIMLIM

Success factors Success factors

of of CASEIFCASEIF

andandLIMLIM

2

Fund SummaryFund Summary

3

Equity fund incorporated in October 18, 2000 after initiative by MIF and NORFUND. The life of the fund is 10 years.

The shareholders of CASEIF are MIF, NORFUND; NDF and LAFISE.

Covering all 7 countries in Central America, with HQ in Managua, Nicaragua.

Focus on the SME sectors - companies with fewer than 100 employees and less than US$ 3 million in sales/assets, thereby having a stronger development impact with more poverty reduction.

Investment amount per company: US$ 250,000 up to US$ 1.5 million.

The Fund is being managed by Lafise Investment Management, a JV between NORFUND and LAFISE.

The LAFISE Group – with presence in 10 countries and more The LAFISE Group – with presence in 10 countries and more than of 20 years of experience into a successful than of 20 years of experience into a successful

organization of 1,800 employees organization of 1,800 employees

4

The LAFISE Group – a complete portfolio of The LAFISE Group – a complete portfolio of services and solutions services and solutions

5

Banking (4 banks in the region)

Brokerage services

Trading

Securities

Corporate finance

Insurances

Commodites Broker/Dealer

Warehouse

Currency exchange

Leasing

What represents the Lafise Group for CASEIF/LIM?What represents the Lafise Group for CASEIF/LIM?

6

• Knowlodgement and expertise of the region

• Contacts and relations with authorities, multinational companies, financial system

• Reference of new deals

• Check of references of companies and sponsors

• Support from the corporative team lawyers

• Facilities of logistic

• Help CASEIF´s investees in trading activities, to find clients and suppliers, strategic alliances.

• Reference of potential buyers/investors for the companies in the Portfolio.

• Follow up and supervision of the CASEIF’s investees in each country.

CASEIF financial resultsCASEIF financial results

7

Historical Income/Net profit

-400,000

-200,000

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

2000 2001 2002 2003 2004 Sep-05

US

$

Income Net(loss) profit

US$ Sep-05Income 1,253,391Net(loss) profit 914,751Acc. net(loss) profit 9,729

Break even

CASEIF financial resultsCASEIF financial results

8

• The ROE is 12%.

• Stock redemption of US$ 1.8million. It represents that 19% of the investors contribution has been reimbursed to the CASEIF’s shareholders.

• Before the expiration of the investment period 2 exits has been done and 2 more are on the way for the end of 2005. With this on hands, a 49% of the of the investors contribution will be reimbursed to the CASEIF’s shareholders.

• Given that the investment period is ended, LIM is on position to establish a second fund.

LIM financial resultsLIM financial results

9

US$ 2000 2001 2002 2003 2004 Sep 05Income 62.343 324.726 316.014 464.238 503.341 394.999Net(loss) profit 42.553 74.263 4.791 2.093 92.268 96.614Source: Audited Figures

LIM Net(loss) profit

0

20.000

40.000

60.000

80.000

100.000

120.000

2002 2003 2004 Sep 05

Model of deal structureModel of deal structure

10

Banking modelBanking model Private Equity model

Private Equity model

Hybrid modelConvertible debtHybrid model

Convertible debt

It allows:• To generate income (interests) during the grace period• Security for the loan – to recover the funds• Legal rights like a lender • Time for evaluate a conversion • To extend the conversion period if it is required • Time to establish strong relationship with sponsors• A way of early exit

• Dividends• 1 share with preferential rights• To have the full upside in the exit

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2002 2003 2004 2005Original Investment -450,000Additional capital contribution -37,210 -165,985Sell of CASEIF'shares 1,839,570Net cash flow -450,000 -37,210 -165,985 1,839,570

CASEIF IRR 50%Capital gain 1,150,050

Example 1: First exit of CASEIF - MetroredExample 1: First exit of CASEIF - Metrored

US$

Lessons learned:• Opportune moment to begin the exit process andtalk about it with sponsors

• To make your own valuation of the company and to discuss it in the Board of Directors

• To participates actively in the due diligence and negotiations meetings

• To look for different alternatives

Example 2: Colección 2000 Example 2: Colección 2000

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Currency: US$Jan-Dec 2003 First semester 2004 Second semester 2004

Units solds 893,322 765,074 456,064Average Unit price US$ 1.80 US$ 1.91 1.91Total sales 1,610,042 1,459,717 871,063Cost of Good sales 1,205,761 1,020,590 693,340operacional expenses 462,495 268,137 266,293EBITDA -58,202 171,522 -81,761Interest expenses 205,589 121,729 125,718Depretiation 100,018 48,998 48,998Net income (loss) 305 794 -256,284

Coleccion 2000 average unit price: US$ 1.80

Chinese average unit price: US$ 1.15

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Example 3: Second exit of CASEIF - ConsultelExample 3: Second exit of CASEIF - Consultel

• Contractor of Ericsson for different projects of telecommunications

• Contracts of short term and high profitability.

Lessons learned:

• Not use money of long term for short term projects

• To have an appropiate legal structure focused on the cash control

• To request collaterals not related to the company (personnal assets

from sponsors)

The way to follow up of investeesThe way to follow up of investees

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• To establish strong relationship with sponsors since the initial conversations

• Coaching/mentoring

• To provide value added

• To improve the corporate governance

• Monthly certification of financial statements

• To help in ISO 9000/HACCP certifications • TA Funds – NORAD

• Follow up of environmental issues

• Follow up of laboral rights

To become in a strategic partner

Where to invest? - CASEIF Portfolio Sep, 05Where to invest? - CASEIF Portfolio Sep, 05

Commitment capital US$ M

Delfiplastelfiplast S.A.S.A.Delfiplastelfiplast S.A.S.A.

Country Sector/activity

1.00 Nicaragua ISP/Carrier 0.50 Nicaragua Fishing/value added products 0.51 Costa Rica Niche of Special plastics products 1.30 El Salvador Tourism

0.95 Honduras Niche of special plastic products

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S.A. Muebles 0.80 Honduras Exports of furnitures of high value to USA 0.50 Costa Rica Processing prepared food and canned products

Thanks for your time..........Thanks for your time..........