INVESTMENT
PERFORMANCE 
Tinex d.o.o.

Business Description:
TINEX is the second largest chain of supermarkets in Macedonia in terms of revenue, having grown from a single location with fifteen employees in 1994 to its present size of eighteen stores with over 380 employees. Its stores are neighborhood supermarkets, rather than large hypermarket stores. TINEX was the first company in Macedonia to pull itself above the milieu of independent one-store family owned local supermarkets by offering more spacious and modern shopping environments, larger selections, and competitive prices. By 2001, when Tinex signed the investment agreement with SEAF, TINEX already had ten stores with around 300 employees.

Management:
Tinex is led by Mr. Vladimir Todorovich. Mr. Todorovich founded the company in 1994 with limited capital and with help of supplier credit. From the very beginning of company operations, Tinex placed special emphasis on building a solid management team by means of delegating tasks and nourishing team-oriented work culture. Accordingly, the company was able to have rapid growth and sound financial performance.

Investment Thesis:
Prior to SEAF's investment, Tinex closed-out its first large hypermarket store, within months from the beginning of store operations. Accordingly, the company became financially distressed and needed capital in order to clean its books and maintain competitive edge. At the time of investment, Tinex agreed to refocus on the core competence of efficiently running neighborhood supermarkets rather than western style large hypermarkets. The business plan also called for rapid expansion in the capital city of Skopje in an effort also known as 'fortress Skopje'. Following SEAF's investment in Tinex, the company managed to open new stores in line with projections, completely overhauled its inventory management, introduced new store layouts, provided better incentives and training for the workforce, hired Delloitte & Touch as auditor, and readily asked for SEAF's consulting services. For example, in a one-year time period SEAF's local managers together with SEAF's global business consulting unit successfully implemented inventory reduction strategy by cutting the assortment count from 17,000 to less than 12,000, thus uncovering over $500k in dormant capital. The strategy proved to be right and unleashed more than 15% growth in revenues year-to-year and turned the company around into profitability.

Performance Summary:
Sales and Net Earnings for fiscal year 2002 were $21.6 million and $0.21 million, respectively; as compared to fiscal year 2000 revenue of $16.6 million and Net Earnings of $0.01 million in 2000 (SEAF invested in February 2001). Relating to the exit, in 2002 SEAF used its global reach by contacting Spar International, a large multinational from the Netherlands, to exploit potential acquisition interest from Veropolous S.A., SPAR franchisee in Greece. Ultimately, SEAF's partner Mr. Todorovich and the management group decided to keep Tinex private. Using the exit rights from the Investment agreement, SEAF negotiated a deal with Mr. Todorovich, who purchased SEAF ownership in Tinex. The transaction was finalized at the end of November, 2003 and represented a gain of 3 times SEAF initial investment and an IRR of 59%.
 

INVESTMENT PERFORMANCE

Tinex d.o.o.

Business Description:

TINEX is the second largest chain of supermarkets in Macedonia in terms of revenue, having grown from a single location with fifteen employees in 1994 to its present size of eighteen stores with over 380 employees. Its stores are neighborhood supermarkets, rather than large hypermarket stores. TINEX was the first company in Macedonia to pull itself above the milieu of independent one-store family owned local supermarkets by offering more spacious and modern shopping environments, larger selections, and competitive prices. By 2001, when Tinex signed the investment agreement with SEAF, TINEX already had ten stores with around 300 employees.

Management:

Tinex is led by Mr. Vladimir Todorovich. Mr. Todorovich founded the company in 1994 with limited capital and with help of supplier credit. From the very beginning of company operations, Tinex placed special emphasis on building a solid management team by means of delegating tasks and nourishing team-oriented work culture. Accordingly, the company was able to have rapid growth and sound financial performance.

Investment Thesis:

Prior to SEAF's investment, Tinex closed-out its first large hypermarket store, within months from the beginning of store operations. Accordingly, the company became financially distressed and needed capital in order to clean its books and maintain competitive edge. At the time of investment, Tinex agreed to refocus on the core competence of efficiently running neighborhood supermarkets rather than western style large hypermarkets. The business plan also called for rapid expansion in the capital city of Skopje in an effort also known as 'fortress Skopje'. Following SEAF's investment in Tinex, the company managed to open new stores in line with projections, completely overhauled its inventory management, introduced new store layouts, provided better incentives and training for the workforce, hired Delloitte & Touch as auditor, and readily asked for SEAF's consulting services. For example, in a one-year time period SEAF's local managers together with SEAF's global business consulting unit successfully implemented inventory reduction strategy by cutting the assortment count from 17,000 to less than 12,000, thus uncovering over $500k in dormant capital. The strategy proved to be right and unleashed more than 15% growth in revenues year-to-year and turned the company around into profitability.

Performance Summary:

Sales and Net Earnings for fiscal year 2002 were $21.6 million and $0.21 million, respectively; as compared to fiscal year 2000 revenue of $16.6 million and Net Earnings of $0.01 million in 2000 (SEAF invested in February 2001). Relating to the exit, in 2002 SEAF used its global reach by contacting Spar International, a large multinational from the Netherlands, to exploit potential acquisition interest from Veropolous S.A., SPAR franchisee in Greece. Ultimately, SEAF's partner Mr. Todorovich and the management group decided to keep Tinex private. Using the exit rights from the Investment agreement, SEAF negotiated a deal with Mr. Todorovich, who purchased SEAF ownership in Tinex. The transaction was finalized at the end of November, 2003 and represented a gain of 3 times SEAF initial investment and an IRR of 59%.