Croatia's new balance sheet correction process and other regional restructuring developments

Croatia joined the European Union as its newest member on 1 July to much fanfare.  Joining the European Union promotes among other things a level playing field in trade and customs, investor protection, social rights and employment mobility.  However, as readers are aware, there is no automatic harmonisation of insolvency and restructuring law or practice country by country and interesting local concepts emerge which can offer some useful data and ideas to neighbours.

Croatia recognised that several companies are now over-indebted, including a number of large companies, and have little or no prospect of repaying all bank loans within a reasonable time frame.  The Croatia National Bank’s Governor, Boris Vujcic, recently presented in London the CNB estimate that Non Performing corporate loans in Croatia may have been be as high as 25% when they enterered the EU.  Other neighbouring countries face similar or even worse scenarios.

This is a common problem across the world and has given rise to the phrase of “zombie” companies.  Zombie companies just about keep going as long as there is no trigger for new money and interest rates remain low, but seem to offer little in the way of growth or realistic remedies for creditors or shareholders alike.  Zombies seem content to stumble on day to day without much direction, hoping for the discovery of a miracle cure.

Continue reading Croatia's new balance sheet correction process and other regional restructuring developments

Bulgarian Associate at Wyn River takes up Government post

We were delighted when Krassin Dimitrov, with excellent sector reform experience and a former investment banker, agreed to join Wyn River as an associate representing Bulgaria at the beginning of 2013.

A close work colleague of fellow Wyn River associate Hugo Green, Krassin has worked not only on several important Bulgarian projects but also on key regional assignments in Serbia, Kosovo, Bosnia and Herzogovina, Montenegro and elsewhere.

In June, Krassin was invited to take up the position of Deputy Minister of Economy and Energy at the Government of the Republic of Bulgaria.  Taking up that position to help drive the reform agenda and encourage growth in his own country means, of course, that he must step down from private sector projects.  All of us at Wyn River wish Krassin and Bulgaria well with the exciting challenges ahead. 

Wyn River team gain three new external positions

Signe Viimsalu has been apponted CEO of the Estonian Business Angel Network which enhances Wyn River's access to start up finance and strengthens the advice we can give to businesses regarding investor and invention protection.  Wyn River is connected to several other Angel Investment Networks across our region.

Nigel Davies has been appointed an Ambassador to the Turnaround Wing of Insol Europe.  The Ambassador role is designed to draw attention to the important debate on restructuring in various countries that can be delivered using both in-court and out-of-court techniques as well as encouraging more practitioners and Chief Restructuring Officers to join the Turnaround Wing.

Nigel has also taken up the role of head of the infrastructure focus group at the British Croatian Business Club, whose objectives include improving the trade and business climate in Croatia as well as providing a central point to increase UK/Croatian business volumes.  The British Croatian Business Club also provides a forum for more connections and partnerships to be formed between the Croatian business diaspora across the world. The Club was formed at the beginning of 2013, a significant year for the country as it is scheduled to join the European Union on 1 July later this summer.

Joint London Business School & Turnaround Management Association seminar

"Distressed Investing at the Coal Face"

The active Turnaround Group at the London Business School scheduled a further seminar in February which was well attended by both TMA UK members and LBS students.  There were two case studies presented, one a hands-on review of how a Private Equity turnaround fund will consider investment opportunities and one on additional factors to take into account when cross-border challenges are added to the scenario.

Philip Dougall of Kelso Place Asset Management presented a UK manufacturing case study which compared the merits and risks associated with two similar opportunities in the same industry.  Nigel Davies of Wyn River Limited presented the additional control risks associated with cross-border opportunities by featuring a Russian & Ukrainian debt-for-equity case study on "Gallery Media", available for download here.

Many thanks to the Turnaround Management Association UK for inviting Wyn River to participate, to David Hole of Galen Partners for acting as Chairman, and to the London Business School for co-hosting an enjoyable and informative event.

EU Enlargement in light of the current crisis

As a footnote to the write up on the Western Balkans Enlargement conference in London on 14 February, here is a very recent statement from Štefan Füle, European Commissioner for Enlargement and Neighbourhood Policy which confirms and validates what was discussed a few weeks ago.  

1st South East European Ministerial Conference, 14 February 2013, Europe House, London. Assessing EU Enlargement in the Western Balkans: Progress and Challenges

Organised by International Business and Diplomatic Exchange and SEESOX South East European Studies at Oxford, St Anthony’s College, University of Oxford (

Supported by Wyn River Limited

A very interesting, intelligent and balanced debate between government ministers, academics, financiers and investors covering such diverse topics as the Sovereign Debt Crisis, EU expansion, Central Banks and the Vienna Initiative 2.0, Turkey’s role, what can be learned from Greece, open society, the rule of law, enterprise and skill gaps and political and economic stability generally. There is no denying the tensions which still exist across South East Europe and the Western Balkans specifically, but all stakeholders seem to be adopting a very practical approach to doing business with their neighbours.  The British Government has an “Emerging Europe” initiative run by UK Trade & Investment to encourage UK businesses to consider exporting to a large and relatively untapped consumer base and to make use of excellent engineering skills and low labour costs in the UK’s own hunt for competitive advantage in a global marketplace. 

There was a lively discussion about whether the European Union has failed to bring anticipated reforms, wealth and stability to the region and whether it is losing popular support.  The rules of the European Union which Accession Candidate countries must adopt (such as Croatia, due to join the EU this July) offer best practice and create a level playing field not just in legislation but also physical border crossings, health and safety and labour mobility.  The central funds available from Brussels and Washington help to reduce poverty and finance road and other infrastructure upgrades which provide jobs and supports industry.  The private sector has a key role to co-invest and manage these new projects efficiently for an appropriate commercial reward.  However the demonstrations in Bulgaria in February 2013 over energy prices which led to the resignation of the Government show how effective regulation is essential where the State and private sector interact.  No safety net by the State for those with low income is bound to create social discontent when energy bills rise above the level of state pensions. 

I made the comment at the seminar that individual countries need a positive press to overcome rather negative sentiment that most British people and businesses have towards this region.  My company, Wyn River, works alongside organisations such as UKTI, IBDE, SEESOX and the European Bank for Reconstruction and Development to bring the merits of the region to the attention of potential investor candidates and help them to de-risk and finance their expansion.  But it is still the responsibility of governments to adopt the prudent policies, priorities and predictability needed to make their markets attractive for new long term FDI partners to work alongside their own high quality state companies and local SMEs.  Governments need to install effective and fair tax systems to finance a cost-effective public sector.  To use new technology such as e-customs and e-governance to eliminate “state to business” and “state to citizen” corruption windows.  There is no quick fix for these new democracies to reach full consensus on several key issues, but as this conference showed, new generations of smart politicians have the power and vision to lead the region to a new prosperity. 

Photo credit:  Alban Bytyci


The delegate list from the conference is available here 

Photographs of the conference speakers and delegates are available here 

Pilot's Log - Spotlight on Serbia

In the first of a series of country reviews commissioned by Pilot Partners, Wyn River put the spotlight onto Serbia.

Serbia may be rather off the radar for South East Europe compared to high growth Turkey, but it should not be overlooked.  Serbia is now an EU accession country and future sector reform projects will offer UK and other Western businesses consulting, engineering and financing mandates.  We recommend you look for quality local inputs to work alongside your skilled people and my firm, Wyn River, can help with that.  Private finance and operations for utilities and infrastructure could be a volume play in Serbia for many years but will not fully come on stream this year.  But the core industries of agribusiness, manufacturing and an emerging IT sector may well offer good private sector strategic and financial investment and trading opportunities in the much shorter term.

Read the full article from page 6 of the February 2013 Pilot's Log here.  

Red Nose Day is 15th March!!!

Yes folks!  In order to support the good work of I will be wearing a red nose on Twitter during March!

Where is the growth? And how risky is it?

Welcome to 2013!  And welcome to the first blog from Wyn River Limited.

Wyn River is a new niche advisory firm of highly-networked independent associates focused on improving business performance in Central and South East Europe and the Commonwealth of Independent States.  We advise business owners across the region about their business plans, debt and equity funding solutions as well as cashflow and profit improvement strategies.  We also advise stakeholders on project finance and restructuring issues in the region.  We apply our knowledge and connections to help businesses from outside the region to assess new market opportunities and find excellent local partners.

Our first blog is dedicated to growth.

Continue reading Where is the growth? And how risky is it?

In the News

Our Wyn River associates are active across our region meeting potential clients and key stakeholders involved with finance, corporate governance, risk and growth issues.  We also regularly speak about financing topics.  Here is a selection.  Those dated 2012 or earlier were speaking engagements before Wyn River was formed.  We believe active debates with regulators, businesses and practitioners do change opinions and encourage reform of policies and adoption of best practice over time.

Continue reading In the News
clever girl