Langbar International

CrownCorporation LTD (CCO)
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Edward Kalfayan
December 16, 2003
AIM listing
CCO listed on AIM 30 October 2003, and traded from the following day having raised €219m (£150m), mainly from institutions in Europe. At €5.00 per share, the price at which the majority of the 43.89m shares were subscribed before listing, the Company had a market capitalisation of €350 million and was immediately one of the ten largest companies on the AIM market. Since then, the share price has more than doubled to £7.50. The ordinary are capitalised at £378m and the warrants at £3.75 each, worth £379m. So the original investors now hold shares to a total value of 278% of their original stake on admission to AIM; and the capitalisation has become the third largest on AIM. Include the value of the warrants, then Crown Corporation is now the largest AIM stock.
The average investor is clearly bemused by the sudden appearance and rapid rise in the price of these shares, probably because the funding was achieved in Europe, and there was no need for strong promotion here. So there is no news. Since the projects to be fulfilled are in the Americas there will be little gossip in the market of the kind which emanates from local and trade newspapers, and friendly staff socialising in the pubs. Nevertheless there is clear evidence in these first two contracts of a powerful combination of alliances and networks, which it is more than plausible will exploit synergy and thus add value to whatever it tackles.

Caveat
However it must be a while before any work gets invoiced and appears in a result, so the share price is bound to be speculative and volatile, based on momentum generated by unpredictable newsflow. A paradise for those living with high risk, high reward, but a very interesting addition to the London market.

Modus Operandi
Executive Chairman Dr. Mariusz Rybak, and Chief Executive Wolfgang K. Menzel have identified an opportunity to invest in and manage undervalued public companies not performing in line with their peer group, mainly in the Canadian and US .
Crown will acquire control of developing businesses with potentially high margins, and rely on outside advisers and consultants with experience in particular industries, to form multidisciplinary teams to help in restructuring and managing these businesses
New or additional management, additional capital and new strategies will be introduced to create superior performance and substantial equity growth. International contacts will be tapped to generate new business for these subsidiaries.
The listing on AIM was to offer shareholders liquidity, transparency, and thus more security . Crown believes it offers an excellent investment opportunity, combining the potential for high growth with the highest levels of corporate governance and an ethical management strategy.” No more than €60m or 25% of its net assets or 20% of its market capitalisation (whichever is the greater) at the time of that acquisition will be invested in any one company. The Company will make any acquisition that will expose it to unlimited liability.

The Directors have experience of working with first rate experienced investment bankers particularly in Canada and the US, with a broad range of experience in investment analysis, business and technology.

They have many years experience in the financial management and reconstruction of underperforming companies.
Crown aims to achieve long term shareholder returns in excess of the Morgan Stanley Capital International World Index (ex UK).

Each original subscriber received one First Warrant and one Second Warrant
Warrants. With each First Warrant the holder can subscribe for a share at €7.50 up to the first anniversary of Admission; and with The Second Warrant a share at €15.00 up to the second anniversary.. The total number of Common Shares will be increased by 87,780m through the exercise of both these Warrants, virtually tripling the original number of shares.
Insinger Townsley is the broker and Nabarro Wells the nominated adviser to the Company.

Large Contracts in Argentina
Lambert Financial Investments Limited, as a strategic adviser to Crown, has been instrumental in opening the Latin American market and securing the contracts for Crown.
Multiple contracts to a total value at completion of approximately US$633 million, for the installation of waste management and water treatment infrastructure, and other construction projects in Buenos Aires were announced on November 30.
US$180 million will be expended on waste management, US$11 million on water treatment and US$442 million on construction.

These works to start by July 2004, are planned for over 14,000 dwellings, 9 industrial parks, 2 commercial centres, 3 complexes of municipal buildings and 2 hospitals; with 3 waste management treatment plants and 40 water purification systems to be delivered during calendar H2 2004.

It is intended that these contracts will be fulfilled largely by companies in which Crown plans to take substantial equity interests, as part of its strategy to restructure and turnaround underperforming businesses.
The contracts will place Crown in a strong position to improve the sales and marketing of its investee companies. They show how Crown will use its international contacts to generate new business for the companies in which it is takes a substantial interest, particularly in emerging markets where there is the potential for high growth.

Crown, differs from traditional investment or venture capital firms, because it is an operational company, able to generate new business for the companies in which it invests. The emerging markets, such as Argentina, offer excellent growth opportunities for the sectors targeted in the AIM Admission document.'

Each contract that Crown Corporation has been awarded will be backed by bank guarantees or similar arrangements to give significant protection against financial failure of counter-parties to the contracts. The Company should therefore have a very high level of certainty that payment obligations will be honoured, and will be more able to to borrow against receipts due should it wish to do so.

Major Contract for security products and services
Announced today, December 16 , Crown will provide US$70 m of security products and services, sufficiently sensitive re secure implementation, that further details can note revealed at present.

As with the Argentinian contracts, the intention is to full fill with companies in which Crown plans to take substantial equity interests, as part of its strategy to restructure and turnaround underperforming businesses in the North American marketplace.

'The security industry is a high growth sector on a global basis. International factors, such as terrorism, have placed a heightened emphasis on the provision of security services. Crown's entrance into this market also opens up a realm of business
opportunities for Crown and its future investee companies.'
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