Click here to visit our sponsor: Home Page
INVgr Directory

Athens Olympic Games
Company Profiles
Capital Markets
South-East EuropeEconomic Indicators
Opinion & Interviews

Registration Terms
Membership Form


Guest Book
Copyright ©
INV International Ltd.
All Rights Reserved

Click to Visit

Who is Thor Bjorgolfsson, Iceland's lone billionaire?

Thor Bjorgolfsson

Born in 1967, Björgólfur Thor Björgólfsson, better known internationally as Thor (pronounced "tore") Bjorgolfsson, is the largest shareholder in Actavis Group hf., the international generic pharmaceuticals company. He has served as Actavis's board member since 1999 and Chairman since 2000. A dynamic, international entrepreneur and investor with significant interests in pharmaceuticals, telecommunications and financial services, Bjorgolfsson is the son of a prominent Icelandic family. He chose to go to the United States in 1986 rather than join the family firm, Hafskip, which was at the time embroiled in a financial scandal involving fraud and embezzlement. In 1991, he graduated from New York University's Leonard N. Stern School of Business.

Forbes magazine reported that Bjorgolfsson's great-grandfather, Thor Jensen, left Denmark at 15 in 1878, went on to control half a dozen or more businesses, survived bankruptcy twice and ended up as one of Iceland's largest landowners. One son became prime minister; another ambassador to the USA. A son-in-law ran the country's largest shipping line, and a second, Thor's grandfather, headed Shell Iceland (Skeljungur hf.). Bjorgolfsson resides in London, with his girlfriend of 15 years and their son, and is the world's 350th human being with an estimated fortune of USD 2.2 billion (2005: 488th richest person with USD 1.4 billion), according to Forbes' latest annual survey (2006).

Bjorgolfsson spends a significant amount of time in London or traveling in Europe, where he has steadily been building up a growing network of telecommunication players in Central and South-East Europe and a plethora of other businesses in various sectors. He owns substantial stakes in Prague-based Ceske radiokomunikace, a.s. (CRa), which among others owns 39.23% of the shares in T-Mobile Czech Republic a.s. (one of the two largest mobile operators in the Czech Republic), and P4 Sp. z o.o. (a Polish company operating previously under the name Netia Mobile Sp. z o.o.).

T-Mobile Czech Republic (formerly RadioMobil a.s.), the second GSM operator in the Czech Republic, was established in 1996 and in that year began its commercial operations under the Paegas brand name. In 2002, the brand was changed to T-Mobile as part of a trans-Atlantic roll-out that included the UK, Austria, Germany, The Netherlands and the USA. T-Mobile is the only mobile service provider on the Czech market that is part of an international network. The shareholders of T-Mobile Czech Republic are the CMobil B.V. consortium (a Dutch holding controlled by Deutsche Telekom AG), with 60.77% of shares, and Ceske Radiokomunikace with 39.23%. The Czech GSM 900 (1800 MHz) operator, which holds a licence to operate a third-generation UMTS network, had a mobile customer base of 4.4 million, as at December 31, 2004.

The shareholders of P4, the Polish wireless telephony service provider, are Warsaw Stock Exchange-listed Netia SA (30%; formerly Netia Holdings), the leading alternative fixed-line telecommunications operator in Poland, and Novator (70%). P4 won the Polish UMTS tender on May 9, 2005. The Polish company, which in August 2005 announced that it wants to start offering 3G services at the end of 2006, was formally awarded the frequencies' reservation by the Polish Regulator on August 24, 2005. In addition, on May 9, Netia Mobile re-applied for the reservation of GSM 1800 MHz channels (the earlier tender for acquiring GSM 1800 MHz band, in which Netia participated in parallel, remained unresolved). Netia participated in the tender process together with its financial partner (Novator) and in close co-operation with international telecom equipment suppliers (providing vendor financing). With approximately 38 million people and 33% fixed-line telephone penetration rate as at December 31, 2004, Poland represents a highly attractive, dynamic market for private fixed-line telephone providers such as Netia. The company aims to be "the preferred provider of high-quality, customer-oriented, competitively priced telecommunications services to Polish customers".

In Bulgaria, Bjorgolfsson serves as the lead investor in the consortium awarded the privatisation of BTC (Bulgarian Telecommunications Company AD), the country's formerly state-owned telecommunications monopoly, and is a member of the privatised telecom operator's board of directors. BTC, which is the main telecom operator in Bulgaria employing approximately 20,000 professionals, has 2.9 million phone installed connections and this number is still growing. With a population of approximately 8 million, Bulgaria is one of the Central and Eastern European (CEE) countries with the highest fixed-line telephone penetration rate -- approximately 85% of all households have a telephone.

Among many other duties, he is a General Consul of Iceland, representing his country in north-west Russia.

Bjorgolfsson began his business and investment activities in Russia, where he was the co-founder of St. Petersburg-based beverages-firm-turned-brewery Bravo International Ltd. His business partner was fellow Icelander Magnus Thorsteinsson, who today is an entrepreneur and investor with significant interests in aviation and financial services.

Bravo started out in 1993 on a greenfield site, originally bottling soft drinks under a Pepsi franchise, the Baltic Bottling Plant. In 1997, the company sold its soft drink facilities to Pepsi and diversified into the beer market. With a USD 25 million investment from Capital Group of Los Angeles through its Capital International Global Emerging Market Private Fund, for a 30% stake, Bjorgolfsson and Thorsteinsson subsequently expanded into the brewery business by focusing on premium beer brewing, producing three brands -- the mainstream brand Ohota, the upper-mainstream brand Botchkarov, and the Löwenbrau brand, brewed under licence.

The brewery site covered 11 hectares in an industrial area of St. Petersburg less than 10 km. from the city centre. The site was previously an assembly factory for wood-framed windows and the facilities and land were converted in 1998 for use as a brewery.

The company also produced a line of mixed alcoholic drinks under a separate facility and located at a different site, making premixed cocktails and drinks in a can -- so-called flavoured alcoholic beverages (FABs) -- with such partners as Johnnie Walker and Gordon's Gin. It reportedly had revenues of USD 20 million in 1998.

Bjorgolfsson and Thorsteinsson had acquired their beverage experience while working at Viking Brewery in Iceland. The duo focused heavily on the Botchkarov (literally, "the Barrel family") brand, producing the first bottle of this premium Russian beer in 1998. In 1999, Russia's beer consumption per capita stood at a mere 29.7 litres compared to 162.7 litres in the Czech Republic and 52.3 in Poland, according to Union of Russian Brewers data. The Russian beer market had doubled between 1999-2001, with total volume rising to 60 million hectolitres. The Russian beer market continued to grow as consumers switch from both hard liquor and lower-end beer to premium Russian beer. To boost sales and achieve rapid brand awareness by the masses, Bravo International invited 10,000 Russians to St. Petersburg's city centre for a launch party and followed up with a major advertising campaign.

In December 2001, the International Finance Corporation (IFC) lent USD 27 million -- (i) a senior A loan for IFC's own account of USD 5 million, (ii) a syndicated B loan of USD 7 million, and (iii) a subordinated C loan for IFC's own account of USD 15 million -- to Bravo Holdings Ltd., a Cypriot-based company and 100% shareholder of Bravo International. This capital injection was used to fund an expansion plan valued at approximately USD 45 million, including investments in the company's brewhouses, filling lines, fermentation tanks and distribution network. The major shareholders of Bravo Holdings were the founding Icelandic management of Bravo International, Bjorgolfsson and Thorsteinsson, and U.S.-based investment fund Capital International. Additional financing came from Russian and European banks.

Initial beer production capacity was one million hectolitres per annum. In 2001, Bravo reported sales of 2.5 million hectolitres of beer and 400,000 hectolitres of mixed alcoholic drinks. Within three years, Bravo International, Russia's fastest-growing brewer, was heading for a volume of four million hectolitres in 2002. It quickly secured a 17% market share in the St. Petersburg region and 7% in the Moscow area.

After less than a decade of expansion, Bravo International was acquired in early 2002 by Heineken NV of The Netherlands, making the brewing multinational the fourth-largest brewer in Russia in terms of production volume and the country's fastest-growing brewer. Heineken said one of the reasons for its Bravo International acquisition, which placed the Dutch giant in a good position from which to pursue rapid growth in this emerging beer market, was the absence of any corruption within the acquired, foreign-owned and foreign-run company. Heineken's export growth was also restricted by high Russian import duties. The agreement for the acquisition of the Russian brewery was signed on February 1, 2002. The transaction involved a maximum of USD 400 million, provided volume and price targets were met in the twelve months following the acquisition.

Thorsteinsson used some of the proceeds to acquire a 51% stake in Air Atlanta in 2002. Today, he is a board member of Actavis Group hf., Samson Holding ehf. and Chairman of Eimskip. Thorsteinsson is also the majority owner and Executive Chairman of Avion Group, the Iceland-based airline conglomerate and parent to UK carriers Air Atlanta Europe and Excel Airways. The company is hoping to secure a foothold in the US, initially by taking a 19% interest in charter airline Casino Express. Avion Group, which has a maintenance presence through Avia Technical Services, is planning a fourth-quarter 2005 flotation and is expecting to generate USD 1.3 billion in turnover this year, according to Officially founded on January 1, 2005, Avion Group acquired both Eimskip, the leading Icelandic sea transportation company, and Really Great Holiday Company (RGHC), which operates under the trading brand names of Travel City Direct, Transatlantic Vacations and Car Shop, in 2005. Avion brought together Icelandic aircraft wet-lease specialists Air Atlanta, a big ad-hoc charter outfit, and Islandsflug, a hnadling service provider, and merged them under the name Air Atlanta Icelandic. In 2004, Air Atlanta purchased shares in Excel Airways Group PLC, an airline and leisure group based in the UK which operates with the brands Excel Airways, Excel Aviation, Excel Holidays,, Excel24, Freedom Flights and Aspire Holidays, worth GBP 38.9 million, representing 40.5% of the issued share capital.

Icelandic investors acquired GBP 26 million worth of UK companies in 2002, while two years later, that figure had swelled to GBP 894 million, according to The Guardian.

Bjorgolfsson, in turn, used his share of the Russian proceeds to go on a buying spree in his native Iceland and in Europe. Deutsche Bank invited him to invest in a tiny Bulgarian generics pharmaceutical producer. He acquired Balkanpharma (now Actavis Bulgaria) in 1999, through his joint investment fund, Amber International Ltd., and later merged it with Pharmaco hf. (now Actavis Group hf.), a company domiciled in Iceland, in 2000. Balkanpharma required capital to purchase several Bulgarian generics producers in an upcoming privatisation. Bjorgolfsson scrounged up USD 5.3 million by partnering with Pharmaco and his father, selling some stock and borrowing the rest. One year later, when Deutsche Bank cashed out, Bjorgolfsson helped merge Balkanpharma and Pharmaco, took over as Chairman and boosted his family's stake. In 2002, Pharmaco concluded the sale of 80% of its Icelandic interest to newly-established PharmaNor. In the same year, Pharmaco acquired a majority share in Delta, before the two firms merged to create one of the largest companies in Iceland. Previously, Delta had acquired pharmaceutical company Pharmamed in Malta. Also in 2002, UNP in Denmark merged with pharmaceutical producer Omega Farma in Iceland and Pharmaco acquired Serbian pharmaceutical company Zdrevlje.

Novator and Amber International Ltd. are two holding companies owned by Bjorgolfsson with stakes in the financial, pharmaceutical and telecommunications sectors. As at December 31, 2004, Amber owned 32.9% of Actavis Group.

In 2003, Pharmaco acquired a 86% stake in Danish R&D company Colotech AS (Actavis is committed to increase the capital of its subsidiary, Colotech, by EUR 3.0 million; payments will be made in six installments during the next three years, according to Actavis's 2004 Annual Report) and a 15% in Serbian pharmaceuticals distributor Velefarm. In January 2004, an agreement was concluded to acquire Turkish pharmaceutical company Fako, while on May 17, 2004, the Pharmaco Group changed its name to Actavis.

In March 2004, an British subsidiary was established, Actavis UK Ltd. Actavis sold its 15% stake in Velefarm back to the company in July 2004 and acquired Biovena, a Polish pharmaceutical sales and marketing company specialised in the marketing of generics, five months later. At the end 2004, Bjorgolfsson owned 1,085,336,652 of Actavis. In February 2005, Actavis announced its strategic collaboration with Indian pharmaceutical manufacturer Emcure Pharmaceuticals and agreed to acquire Lotus Laboratories, the Indian CRO (contract research organisation) company. If the buy-out, which is subject to the satisfaction of certain conditions, materialises, the purchase price will be EUR 19.1 million plus the cost directly related to the acquisition. Actavis is strengthening its presence in India, since it believes India offers access to a wide range of expert skills and low-cost supply, which in turn provides the Group with the opportunity to achieve further cost efficiencies in R&D and manufacturing. The following month, Actavis acquired a sales and marketing company, Pharma Avalanche, in the Czech Republic and Slovakia. In May 2005, Actavis acquires US-based pharmaceutical company Amide. Four months later, Actavis announced its conditional acquisition of Higia, Bulgaria's largest pharmaceutical distributor, and a new Hungary acquisition, Keri Pharma.

Today, Bjorgolfsson wields direct or indirect control over many of Iceland's largest listed and unlisted firms. He sits on the boards of a number of companies and organisations and is the Chairman of Burdaras hf. (formerly Eimskip Holding), an Icelandic investment fund listed on the Iceland Stock Exchange (ICEX) with substantial cash resources, and of Samson Holding, an Iceland-based holding company that is a significant investor in Reykjavik-based Landsbanki Íslands hf. (National Bank of Iceland), the country's oldest full-service commercial bank. Established in 1885, Landsbanki commenced its operations on July 1, 1886 and once operated as Iceland's central bank (1927-1961). A leading Icelandic financial institution and ninth-largest bank in the Nordic region, with total assets of ISK 1,022 billion (GBP 8.5 billion) as at June 30, 2005, Landsbanki is a rapidly-expanding financial group with ambitions for overseas expansion.

Listed on the Iceland Stock Exchange since 1998 and fully privatised in late 2002, Landsbanki has played a leading role in the country's successful economic progress from its inception. "Landsbanki is a tiny bank by international standards," Bjorgolfsson once said, "but nevertheless a footprint to grow from". In the first half of 2005, Landsbanki reported net profit of EUR 141 million versus EUR 150 million for the whole of 2004 (net profit for the period increased 86% year-on-year to ISK 11.01 billion). For the six months ended June 30, 2005, Landsbanki's total interest income increased 76% to ISK 26.77 billion, while net interest income after loan loss provision increased 58% to ISK 6.72 billion. Total interest income reflects an increase in revenues from commercial banking and private banking, partially offset by higher loan impairments. Net profit benefited from gains on the disposal of groups.

Landsbanki was transformed into a limited-liability company on January 1, 1998, while still 100% state-owned. Through an Initial Public Offering (IPO) in September 1998, which represented the first step towards privatisation, the Icelandic state's holding was reduced to 85% and was further reduced to 72% in December 1999 through another public offering. The stateís stake in Landsbanki was again reduced, this time to 48.3%, after the Icelandic government successfully sold 20% of Landsbankiís total share capital directly to the public through the ICEX on June 14, 2002. An agreement was signed on December 31, 2002 for the sale of the state's remaining 45.8% interest in Landsbanki to Samson Holding for ISK 12.3 billion (USD 145 million at the time). Samson later received an additional discount of ISK 700 million. The privatisation of Landsbanki was completed on February 25, 2003, when the government disposed of its remaining 2.5% of Landsbankiís capital through a public offering. Landsbanki's presently has around 14,000 shareholders.

Today, Landsbanki's largest shareholder is Samson Holding, which owns about 40% of the shares outstanding. Landsbanki's headquarters are located in Reykjavik. Its market share ranges from 30-50%, depending on the area. On December 12, 2005, Landsbanki joined all three equity markets of the Nordic region within OMX Exchanges -- Copenhagen, Stockholm and Helsinki -- at the same time. Landsbanki announced that it intends to trade on its own account and on behalf of its customers. Until December 2005, Landsbanki had only been a member of the ICEX.

Landsbanki has spearheaded many of the new financial products and services now being offered in Iceland to both domestic and foreign businesses. In recent years, the Bank has also played an active role in numerous important developments in the financial sector, including participation in the establishing of entities such as the Icelandic Banks' Data Centre (RB), Visa-Iceland Ltd. and Kreditkort Ltd. (EUROCARD), a principal member of MasterCard in Iceland.

Landsbanki currently maintains 46 branches and sub-branches throughout Iceland. Through its extensive domestic branch system and a wide-ranging network of international correspondent banks, coupled with a broad range of financial products and services, the bank has positioned itself as Icelandís primary source of general and specialised financial services to individuals, corporate entities and institutions. Landsbanki is a strong market player in both equity and fixed income funds in Iceland. The bank has formed strategic alliances in the fields of insurance and real estate financing.

Iceland's Landsbanki Group is rated A2 and A by Moodyís and Fitch, respectively. Bjorgolfsson's father, Björgólfur Gudmundsson, is Chairman of Landsbanki and long-time member of Iceland's Independence Party. It is also involved in private banking and asset management, while its main subsidiaries and areas of activity include:

  • SP Finance Ltd. (Landsbanki acquired a 51% stake in leasing firm SP-Fjarmognun hf. (SP Finance Ltd.) in late 2002)

  • Heritable Bank Ltd. (the specialist mortgage lender and UK subsidiary of Landsbanki has been involved in providing property finance and savings accounts since its foundation in 1877; it specialises in the finance and savings arenas, where the expertise of the bank's staff enables it to provide innovative financial solutions to those seeking savings accounts, wholesale Treasury deposits, mortgages on residential property or property development finance; the bank specialises in providing funding for residential and commercial property development, trading and investment throughout England and Wales; it provides facilities from GBP 500,000 up to GBP 20 million; it also provides Status, Self-Certification, Buy to Let and Semi-Commercial mortgages on property in England and Wales; founded in Glasgow, Heritable Bank moved to Berkeley Square, London in the 1950s; in 2003, it moved to new offices in Hill Street, off Berkeley Square, to enable it to continue the expansion begun after its purchase by Landsbanki; in 2000, the Icelandic bank purchased 70% of the outstanding shares of Heritable Bank and currently owns 100% of its share capital; having purchased Key Business Finance Corporation PLC, a London-based company specialising in providing finance to the legal profession in the UK and has an outstanding track record over 17 years in this market, in April 2005, Heritable Bank is currently seeking further suitable acquisitions to enable it to continue its expansion within the UK; new advances of Key Business in its last financial period exceeded GBP 100 million and pre-tax operating profit amounted to GBP 1.1 million; Heritable Asset Finance Ltd., Heritable's asset finance unit, offers credit both to businesses and individuals, offering finance for motor vehicles, IT and telecommunications equipment, plant and machinery, and printing equipment)

  • Landsbanki Luxembourg SA (asset management, private banking for Icelandic and Scandinavian customers, and lending operations for Scandinavian institutional investors; Landsbanki Luxembourg has a 10.3% holding in Actavis Group hf. (as at December 31, 2004) and a 30.79% participation in Burdaras hf., the Reykjavik-based, publicly-listed investment company (as at September 10, 2005); Burdaras's largest overseas holdings in 2004 were the Nordic investment bank D. Carnegie & Co. AB headquartered in Sweden offering a wide spectrum of financial services in Sweden, Norway, Finland, Luxembourg, Switzerland, the US and the UK (Burdaras's minority stake in Carnegie was 20.3%, as at December 31, 2004) and the British investment bank Singer & Friedlander PLC (with a 9.5% participation, as at December 31, 2004); Burdaras's largest asset is the Icelandic integrated transportation and logistics company Eimskipafelag Islands ehf., or Eimskip for short (Burdaras controlled 94.1% of this firm, as at December 31, 2004; at the beginning of 2004, the subsidiaries Brim ehf. and Burdaras eht. were merged with the company and subsequently the name of the company was changed from Eimskipafelag Islands ehf. to Burdaras hf.); in H2 2004, Burdaras acquired a 76.8% stake in Icelandic investment company Kaldbakur hf., which was merged with Burdaras on October 1, 2004; the merged entity operates under the Burdaras name; following the merger, Burdaras has increasingly taken part in investment projects in the British retail sector, with investments such as jewellery chain Goldsmiths Group, Ice Capital, a mutual fund that invests in retain businesses, and in early 2005 acquired the Big Food Group. which runs the UK food retailers Iceland, Booker and Woodward; other investments in which Burdaras holds a substantial interest of more than 10% are: Icelandic Group hf. (better known for its Icelandic Seafood brand), a publicly-listed Icelandic holding company controlling an international network of 17 seafood production and marketing companies in 10 countries (with a 31.0% participation, as at December 31, 2004); Marel hf., a publicly-listed Icelandic company with a mission to be an international leader in the development and manufacturing of high-tech processing equipment, software and other solutions for the food industry, including seafood, poultry and meat (34.3%, as at December 31, 2004); TM Software hf. (also known as Theriac, the brand that TM Software uses to sell and market its healthcare solutions world-wide), an international software company with headquarters in Iceland, operations in 12 countries and serving over 1,000 healthcare clients in 20 countries (Burdaras had a 41.3% stake in this firm, as at December 31, 2004, while other large shareholders include TM Software's Chairman, Fridrik Sigurdsson, Straumur Investment Bank and the Icelandair Group); and Scribona, a leading IT distribution company and agency in the Nordic region, representing well-known brands such as Samsung, Ricoh, HP, Hitachi and Sanyo as well as being a market leader in complete document management solutions through its subsidiary Carl Lamm; on December 31, 2004, Burdaras also had minority stakes in publicly-listed companies Actavis Group hf. of Iceland (2.8%), Landsbanki Islands hf. (4.5%), Straumur Fjarfestingarbanki hf. of Iceland (9.5%) as well as unlisted firms such as Flow Matrix Co. of the USA (41.4%), Carrera Global Investment Ltd. of the British Virgin Islands (8.9%), Fasteignafelagio Straumur hf. of Iceland (3.3%) and participates in shares of 87 other unlisted companies)

  • Landsvaki hf. (mutual funds)

  • Teather & Greenwood (one of the longest-established British stockbrokers)

  • Kepler Equities SA (a European securities company, previously known as Julius Baer Brokerage)

The latter, Kepler Equities, is a leading European securities company specialised in providing high-quality fundamental research and agency brokerage services to institutional investors. On September 5, 2005, Landsbanki concluded a purchase agreement with Lightyear Capital and Julius Baer Bank to acquire Kepler Equities. This acquisition will increase Landsbanki's commission income by 33%. Initially Landsbanki will acquire 81% of the total shares for a consideration of EUR 76.1 million, valuing Kepler at a total of EUR 94 million. Landsbanki will acquire the remaining shares, currently held by employees, over a five-year period through an earn-out arrangement.

Landsbanki's International Operations now account for over 25% of total revenues and the acquisition of Kepler will increase Landsbanki's commission income by 33%.

Kepler's net asset value is EUR 59.8 million and the purchase price-to-book ratio is 1.57. The sellers are Lightyear, a U.S. private equity house, Bank Julius Baer in Switzerland and Kepler's employees.

Kepler has operations in Amsterdam, Frankfurt am Main, Madrid, Milan, Paris and Zurich. It has a dedicated sales team in New York through a service agreement with Bank Julius Baer. With nearly 50 analysts, Kepler provides local research coverage of over 430 European companies and has over 800 institutional clients. The firm is headquartered in Paris and has a total of 240 employees, including around 95 sales and trading professionals. Local presence and European scale enable the company to maintain long-standing contacts with large international investors and local corporate clients. The company has a market share of 2-4% in secondary equity trading in its various markets. Its equity research is top-ranked by the Institutional Investor journal and Extel Survey. In 2004, Kepler Equities generated earnings before tax and bonus of EUR 9.2 million. For the first half of 2005, it remains profitable. All of Kepler's senior management will continue to work for Kepler following the transaction. Preparations for the integration of Kepler with Landsbanki will begin immediately, with Kepler's senior management working in close co-operation with Landsbanki's management.

The acquisition of Kepler Equities provides Landsbanki with an established presence in Continental Europe and an effective distribution platform for its financial products. Furthermore, this deal forms part of Landsbankiís strategy to become a leading Corporate and Investment bank for European mid and small cap companies.

The deal is considered to be strategically important for Kepler Equities, since it provides the company with the financial and technical resources required to strengthen its core brokerage business. Through this new partnership, Kepler Equities will be able to accelerate its diversifications in the areas of corporate advisory and asset management. These new initiatives will be driven forward by the existing management.

Landsbanki is already involved in the brokerage business outside Iceland through its ownership of Teather & Greenwood Ltd. (T&G), a rapidly-growing UK institutional and corporate stockbroker with offices in London and Edinburgh.

Furthermore, on November 15, 2005, Landsbanki announced it had entered into an agreement in principle to buy an initial 50% stake in Dublin-based Merrion Capital Group, Ireland's leading independent stockbroking and corporate finance firm. The deal is worth a minimum of EUR 55.3 million. Landsbanki will acquire the remaining 50% over a three-year period.

Two years after their former employer staged a management buy-out of NCB Stockbrokers, John Conroy, Adrian O'Carroll, Rory Gillen and other directors at Merrion Capital, have reversed roles with NCB by selling Merrion Capital to Landsbanki. This transaction brings a new impetus to Merrion and opens up Landbanki's European operations to Merrion and its clients.

According to Ireland's Finance Magazine, the deal will net Merrion Managing Director John Conroy, between EUR 5.5 and EUR 8.3 million, at minimum, as Landsbanki is paying out 50% now in cash, with the remainder being paid on an earn-out arrangement over the next three years, which, depending on the profits Merrion generates, may value the firm at well over the price currently disclosed.

The rest will be shared between the other shareholders, of which New-York based investment bank Allen & Company, Inc. has a 30%, which it is estimated, it purchased for USD 3 million back in 1999, according to Finance Magazine.

Merrion employs 75 people in Dublin, around 55 of which are shareholders. Up to now Merrion had been 70% owned by staff and 30% owned by Allen & Co.

All conditions of the deal have been, met including the no-objection from the Icelandic Financial Supervisory Authority and the Irish Financial Services Regulatory Authority.

In a Landsbanki press release announcing the the initial acquisition of Merrion, the Icelandic bank's CEOs Halldor J. Kristjansson and Sigurjon Th. Arnason expressed their pleasure in welcoming Merrion into the strategic alliance: "The Irish financial services market is of strategic interest to Landsbanki due to its size, location, and characteristics and we believe that our size and capabilities are very relevant in Ireland. Since entering into the agreement to invest in Merrion, we have continued to realise the outstanding fit between Merrion and Landsbanki, including the current banking operations in London and Luxembourg and Landsbanki's securities operations in the UK and mainland Europe and New York. We will immediately initiate the strategic co-operation between the companies, bringing together the various expertise of the now enlarged Landsbanki group with the view of harmonizing the service and product offering, while leveraging and supporting the local identity, expertise, and knowledge of Merrion."

Halldor J. Kristjansson, Sigurjon Th Arnason and Bjarni Th. Bjarnason, Landsbanki's Senior Manager of Corporate Advisory, have been appointed as the Landsbanki representatives on the board of Merrion. Raymond Curran will continue to chair the Merrion board.

On the stockbroking side, Merrion has established an international reputation for the quality and independence of its research and sales teams. In the Irish Finance Magazine's Annual Stockbroking Survey 2005, Merrion polled very strongly, with Robert Brisbourne taking 'Research Report of the Year,' and 'Analyst of the Year'.

Established in 1999, Merrion has been involved in most of the major corporate finance deals in the Irish market in recent years, including the IPO of eircom Ltd., the take-private of Jefferson Smurfit (both EUR 3.5 billion deals), the take-private of Arnotts and the sale of ACC Bank by the Irish government. Merrion CEO Conroy sits on the board of eircom Ltd. as a non-executive director.

The take-over will give Merrion the opportunity to access a much wider audience for its products, and will also enable it to play a larger role in corporate finance, and get more involved in the origination of transactions.

According to Finance Magazine, Merrion will also expect to expand its wealth management and fund management divisions across Europe by linking up with other Landsbanki operations such as Landsbanki Luxembourg.

With Landsbanki's acquisitions of Merrion, Teather & Greenwood and Kepler Equities, combined entities will now provide research for over 700 companies.


Bjorgolfsson is Chairman of Burdaras, which has been a leading investment company in Iceland in recent years and is now in the process of merging with Straumur Investment Bank to form a powerful investment bank. The merger plans, announced on August 2, 2005, foresee that Burdaras' shareholders will now own shares in larger and more vital financial enterprises than the one they previously owned. "Landsbanki and Straumur are among those Icelandic companies that have grown most rapidly in value in recent years," Bjorgolfsson said, "and I am convinced they will continue to do so. I intend to do my part to ensure that the companies successfully proceed along their respective paths, the one as an all-round commercial and investment bank and the other in more specialised investment banking activities. When I took over as Chairman of the Board, it was with the stated intention of creating a solid, long-term structure for the company. Now, sixteen months later, this has been accomplished, while during the same period the value it represents for shareholders has grown by around 86%."

The Straumur Investment Bank - Burdaras merger creates a vigorous company with a broad group of around 22,000 shareholders. It is believed to strengthen Landsbanki, both in terms of its general banking operations and investment banking activities.

Certain assets of Burdaras, including shares in the Stockholm-based investment bank D. Carnegie & Co AB, Intrum Justitia, Marel, together with movable assets, of a total value of ISK 37 billion, will go to Landsbanki. Burdaras's operations, together with the company's other assets, will merge with Straumur. Following the merger, Landsbanki's equity will be close to ISK 100 billion and the equity of the new investment bank, which is to be called Straumur-Burdaras Investment Bank Ltd., will be just over ISK 100 billion. Before the merger is effected, Burdaras will increase its share capital by around ISK 10 billion in connection with the acquisition of specific assets of the investment company Fjárfestingarfélagið Grettir hf., as explained in a notification to the ICEX.

Carnegie is an independent Nordic investment bank with a strong position in stockbroking, investment banking and asset management. Bjorgolfsson sits on Carnegie's board, serving as a Non-Executive Director and representing Burdaras.

Media and publishing

Landsbanki and its subsidiaries own approximately 15% of Dagsbrun (formerly Og fjarskipti hf., ICEX ticker: DB), a publicly-listed investment firm and holding company that owns, acquires and develops companies active in telecommunications, media and entertainment. Dagsbrun is the parent company of:

  • Og Vodafone, Iceland's second-largest telecom player;

  • P/F Kall, the Faroe Islands' second-largest telecom company;

  • 365 Media, Iceland's largest media company, and 365 Media Print;

  • Internet a Islandi.

Through its 365 Media Print unit, Dagsbrun publishes newspapers and magazines. The company also owns and operates the Web site, is involved in television and digital broadcasting, is about to launch a news TV station, NFS, and also holds shares in Isafold printing house, Posthus and Saga film. NFS is expected to greatly boost the news reporting and news commentaries in Iceland. NFS will handle news gathering for all the media that form part of 365 and broadcast news, news commentaries, and shows on the television channel bearing the same name from 7 a.m. until 11 p.m. The aim is for this new television station to begin broadcasting during the fourth quarter of 2005. With this new channel, 365 Media is expected to contribute to an even more diverse topography in Icelandic media and revolutionise news communication.

"[Iceland's main private television station] Stod 2 has set a record in the number of subscribers this year," said Eirikur S. Johannsson, CEO, Dagsbrun, commenting on his company's 2005 nine-year results. "Digital broadcasting under the name of Digital Island has revolutionised the choices available to subscribers of 365 Media tremendously in the last year. In Digital Island there is a varied selection of material through Channel 2, the sports channel Syn, Sirkus and foreign television stations. The number of channels broadcast by Digital Island is now 52, including many diverse foreign television stations. A growing number of homes therefore choose Digital Island as a future broadcast media."

Founded in 1998, Dagsbrun also publishes a number of weekly specialty papers such as Iceland's largest business newspaper. Dagsbrun's Birta is the country's most widely-read magazine, while is the most visited Web site. In addition, Dagsbrun publishes Frettabladid. Iceland's two most widely read daily newspapers are Morgunbladid (established in 1913) and Frettabladid. "Frettabladid is the largest newspaper in Iceland and the average reading of the newspapers was 68% according to the last media research conducted in September [2005]. The position of Frettabladid is thus very strong in all age groups." Eirikur states moreover that this year, 365 Media Print set out with ambitious goals in newspaper publishing. "One could mention various accessory papers and magazines, such as the Sirkus magazine and the Veggfodur lifestyle magazine."

Dagsbrun reported earnings after tax for the first nine months of 2005 of ISK 554 million compared to a profit of ISK 367 million for the same period in 2004. Pre-tax profits were ISK 673 million for the first nine months of 2005, cash and cash equivalents from operations less financial items reached ISK 1,893 million, operating revenues were ISK 10,866 million and EBITDA amounted to ISK 2,319 million.

Og Vodafone hf. is the dual-brand name for Iceland's telecommunications network and services, which has been launched in co-operation with Vodafone Group PLC of the UK. In 1998, Gudjon Mar Gudjonsson founded Islandssimi, the first competitor to Iceland's state-controlled telecoms monopoly. Og Vodafone hf., which started operating on April 16, 2003, is the outcome of a merger of three Icelandic telecom players -- Islandssimi hf., Tal hf. and Hallo! Frjals fjarskipti. Listed on the ICEX, the company is now part of the Vodafone network and the country's second-largest telecommunications operator.

Og Vodafone, the second-largest telecommunication operator in Iceland, has secured a market share of almost 25% and offers its services to tens of thousands of individuals, as well as many of Iceland's largest corporations. Through its partnership with Vodafone, Og Vodafone will continue in the footsteps of its predecessors. Og Vodafone also owns the Faroese communications company P/F Kall, the Faroe Islands' GSM 900 operator since November 2002. This is a group of 18 Northern European islands, of which 17 are inhabited, is located in the North Atlantic, about 322 km. North-West of the Shetland Islands, between the Norwegian Sea and the North Atlantic Ocean, and about one-half of the way from Iceland to Norway. The population of the Faroe Islands (47,000, July 2005 est.) is largely descended from Viking settlers who arrived in the 9th century. The islands have been connected politically to Denmark since 1386. A high degree of self-government was attained in 1948 (the island group is part of the Kingdom of Denmark and a self-governing overseas administrative division of Denmark). Aided by a substantial annual subsidy (15% of GDP) from Denmark, the Faroese have a standard of living not far below the Danes and other Scandinavians. P/F Kall's reported nin-month 2005 operating revenues of 2005 reached ISK 170 million and EBITDA of ISK 33 million (EBITDA ratio: 19.4%), is line with the Dagsbrun's plans.

According to the Central bank of Iceland's report entitled the "Economy of Iceland 2005", the country's telecom market is characterised by one of the world's highest penetrations of broadband, Internet and mobile phones. Broadband penetration per 100 inhabitants was the fourth highest in the OECD in 2004, surpassed only by Denmark, South Korea and The Netherlands. In 2004, Iceland had the second-highest mobile penetration in the world, after Luxembourg, with 99 wireless subscribers per 100 inhabitants. 89% of Icelandic households own a computer and 84% have access to Internet (2005). The percentage of households with an ADSL, SDSL or other xDSL connection has increased steadily in recent years to 54% in 2005. Iceland has a population of 293,577 (December 31, 2004).

Dagsbrun is currently examining investment opportunities overseas, primarily in North and North-East Europe.

Supporting culture and the arts

A pro-active patron of arts and culture, Bjorgolfsson also represents Iceland in North-West Russia as the General Consul of Iceland. In addition, Bjorgolfsson is backing an Icelandic adaptation of an English interpretation of William Shakespeare's Romeo and Juliet, which he helped produce in London's West End and hopes to bring to New York City. It is a circus-orientated version of the classic play using acrobatic, aerobatic and clown-esque techniques, all without losing the tragic fundaments of the powerful play. This production closed on January 9, 2005 and is performed by Artbox / Vesturport, a dynamic group of actors based in Iceland. Furthermore, in October 2004, Icelandic opera and art contributed to a special programme of cultural events at Sofia University in Bulgaria. Sponsored by Actavis and the National Bank of Iceland (Landsbanki Íslands), the IceArt initiative aimed to reinforce cultural links between the two countries. Money raised at all the events were donated towards the work of an international women's organisation in Bulgaria, which promotes breast-cancer prevention, research, education and treatment.

From tiny Bulgarian drug firm to international generic pharmaceuticals company

Actavis Group hf. is a leading player in developing, manufacturing, marketing and selling high-quality generic pharmaceuticals. The Group now operates across five continents and is headquartered in Hafnarfirdi, Iceland.

Founded as Pharmaco in 1956 and previously operating under different names such as Balkanpharma, Pharmamed, Delta, Omega Farma and UNP, the Group aims to become a leading player in the development, manufacture and sale of high-quality generic pharmaceuticals. The Actavis Group has established itself as a valued and expert supplier of pharmaceutical intellectual property.

Strategic acquisitions and investment in product development are fuelling the Group's growth and have positioned Actavis to take advantage of emerging opportunities in the industry. Actavis's strategy of being the first to launch key products in growth markets has been, and will continue to be, fundamental to the Group's success.

Actavis has modern manufacturing facilities in Bulgaria, Malta, Turkey, the USA and Iceland that are EU-GMP (Good Manufacturing Practice) approved. The Group's US manufacturing facility is FDA approved.

On May 20, 2005, Actavis Group and Amide Pharmaceutical, Inc., a privately-owned U.S. generic pharmaceuticals company, announced that Actavis reached an agreement to acquire Amide for an initial gross consideration of USD 500 million in cash with up to an additional USD 100 million payable over two years subject to performance. Upon closing, the acquired company is expected to have a cash balance of approximately USD 40 million. The deal brings together two premier generics companies with complementary strengths in Europe and the USA and represents a significant milestone in Actavis's plans to become one of the leading global companies within the sector.

The combination of Actavis's brand and product development strength and geographic coverage in Europe with Amide's strategically important foothold in the U.S. market is expected to generate significant opportunities to drive revenue growth, margin enhancement and create further value for the enlarged Actavis Group.

On completion, the operations of Actavis Inc. in the US will be combined with the activities of Amide in New Jersey.

Amide Pharmaceutical develops, manufactures and markets a select line of high quality pharmaceuticals. The company, founded and incorporated in May 1983, is committed to providing its customers quality products, first-rate service and timely deliveries.

The acquisition provides Actavis with a platform from which to launch future products into the US, the worldís largest generic pharmaceuticals market. The enlarged group will benefit from products that have been identified in Amideís portfolio that can be marketed in Actavis's existing markets. Actavis will gain access to Amideís best in-class product development and regulatory capabilities in the US as well as its broad experience in marketing and distribution. Actavis will acquire increased production capacity through Amide's U.S. Food and Drug Administration approved manufacturing facilities and new plant, expected to be completed in 2006. The enlarged Group will have one of the broadest portfolios in the generics sector with over 500 products on the market and minimal overlap between the respective products. The enlarged Group has 136 products in its in-house development and is expected to file at least 15 Abbreviated New Drug Applications (ANDAs) in 2005. Actavis expects the acquisition to be 45%-50% accretive to profit before tax and 30%-35% earnings per share in the first full year following completion.

Actavis's additional manufacturing in Serbia currently services domestic and other markets for own-label products outside the EU. The plants produce a variety of medicines in different formulations including tablets, capsules, injectables, suspensions, suppositories, creams and ointments.

An extensive network of sales and marketing offices enables effective market penetration. Strategic acquisitions, the opening of new sales offices and intensive investment in the development of generic pharmaceuticals are fuelling the growth of Actavis and have positioned the Group to take advantage of future opportunities.

Experienced teams of pharmacists, chemists and other scientific professionals help to make up a total workforce of around 7,000 employees.

Before May 2004, Actavis Group hf. was known as Pharmaco hf. Operating in 25 countries, the Group comprised of nine companies that each had been trading for many years and all had established strong reputations in their respective local markets: Balkanpharma (Bulgaria), Delta, Fako (Turkey), Medis, NM Pharma, Omega Farma, Pharmamed, UNP and Zdravlje AD (Serbia). Actavis Group is committed on behalf of its Serbian subsidiary, Zdravlje, to invest EUR 11.4 million in Serbia during the next four years, according to the Group's 2004 Annual Report. During 2004, Actavis increased its ownership in the Serbian pharmaceutical company by EUR 3.0 million, raising its participation from 71% to 73%, as at year end.

In January 2004, one of Turkey's largest generic pharmaceutical companies, Fako, was acquired. Producing finished products and active pharmaceutical ingredients, the Turkish firm represents a strong platform for Actavis Group's expansion into Southern Europe. Also in 2004, Actavis's site at Dupnitza in Bulgaria was upgraded to meet GMP standards. In February 2004, the acquisition of Pliva Nordic was finalised, consolidating Actavis's sales and marketing presence throughout the entire Nordic region. With a sales and marketing function in Finland and Norway, Pilva Nordic was sold to Actavis by the Croatian pharmaceutical company Pilva.

Experiencing rapid growth in recent years, Actavis is listed on the Iceland Stock Exchange. In 2004, Robert Wessman, President and CEO of Actavis Group, was voted Iceland's Businessman of the Year.

Actavis EAD (formerly Balkanpharma Holding AD)

With its sights set on becoming the leading European low-cost producer of generic medicines for human and veterinary use, Actavis EAD (formerly Balkanpharma), Bulgaria's flagship producer and exporter of generic medicines, embarked on an aggressive modernisation programme aimed at raising production standards to Good Manufacturing Practice (GMP) levels. GMP is the European standard for the production of medicines and pharmaceutical products.

Through the provision of a EUR 21.5 million loan, the London-based European Bank for Reconstruction of Development (EBRD) has been supporting Actavis's efforts to modernise its facilities, upgrade its information systems, and raise environmental standards at its three manufacturing plants at Dupnitza, Troyan and Razgrad.

With EBRD's financing, Actavis has been able to maintain traditional export and domestic markets, where GMP requirements are being introduced, and it will be able to increase its access to European markets, where GMP certification is a prerequisite for market access.

Vladimir Afenliev, Executive Director of Actavis EAD, was appointed Chairman of the EU Accession Committee of the European Generic Medicines Association (EGA) in November 2005. It was the first time that a Bulgarian manager from the pharmaceutical business receives such recognition. The EGA is the official representative body of the European generic pharmaceuticals industry, which is at the forefront of providing high-quality affordable medicines to millions of Europeans while stimulating competitiveness and innovation in the pharmaceutical sector. The EGA represents over 500 companies and their subsidiaries from greater Europe, and over 100,000 jobs. Generic medicines are less expensive than brand-name equivalents. They save EU patients EUR 13 billion each year, and create the budget headroom needed to pay for the newer expensive products, treatment and services.

Actavis divests non-core units

On July 22, 2005, Actavis Group announced that its Bulgarian subsidiary, Balkanpharma Razgrad AD, has partly been divested to Biovet AD Peshtera. The latter manufactures active pharmaceutical ingredients (APIs), veterinary products and finished pharmaceutical forms. Actavis will now divest a part of the site that manufactures APIs and veterinary products. Actavis will continue operating part of the plant related to the manufacture of finished forms. Financial details were not disclosed. The sale of the plant reflects Actavisís strategy to focus on growing its core business.


In June 2004, Viva Ventures Holdings GmbH, an Austrian-registered vehicle, acquired a 65% stake in BTC, Bulgaria's formerly state-owned national telecoms provider, at a privatisation tender for EUR 280 million plus a EUR 50 million capital increase, previously agreed redundancy figures and an also previously agreed minimum EUR 400 million programme of investment. Advent International Corp., one of the world's largest private equity firms, and the Bulgarian government signed the agreement for BTC's purchase on February 20, 2004.

Financial partners in the transaction included Bjorgolffson, the EBRD, Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden (FMO, the Dutch Development Bank) of The Netherlands, the Abu Dhabi Investment Authority (United Arab Emirates), Swiss Life Private Equity Partners, Enterprise Investors, and NBG Venture Capital SA (the private equity/venture capital arm and a member of state-run National Bank of Greece SA (NBG), the largest financial group in South-East Europe and largest Greek bank).

One of the last European telecoms operators to be privatised, BTC's sales process commenced in early 2002 but was protracted as a result of political opposition which sought to halt or delay the transaction. A high-profile deal, monitored by the international business press, the successful closure of the transaction was regarded as not only a major achievement for the Bulgarian government, but also a milestone in the country's move towards its anticipated EU entry.

Although highly profitable, BTC is in need of major investment in order to significantly upgrade its network, including digitalisation and the introduction of a new billing system. In common with other formerly state-owned enterprises, the company will transform itself to focus more on customer service while overhauling its organisational structure, staffing and working practices. A new senior management team of experienced telecoms executives was appointed in February 2004, assuming responsibility for the future direction of the business.

Although BTC lost its monopoly over voice services in January 2003, competition in the fixed line market has to date been limited. Conversely, the mobile market has grown rapidly in recent years. BTC is well placed to respond to this growth, with the GSM licence granted as part of the privatisation enabling the launch of a new mobile service, vivatel. Officially launched on November 5, 2005, vivatel is the trademark under which mobile operator BTC Mobile is operating in Bulgaria.

"vivatel is set to shake up the market," according to Dennis Wallach, BTC's CEO. "We have already seen the benefits in price reductions for customers. The other operators have been forced to halve their rates in anticipation of our launch. Finally, we are seeing real competition enter the market."

Bulgaria's third GSM licence was awarded to BTC as part of the privatisation deal, without the Bulgarian government having to call for a tender. BTC received the licence after remitting the fee of EUR 27.6 million. In the beginning of 2005, BTC also successfully acquired 100% of RTC Mobikom, an analogue operator in which Britain's Cable & Wireless PLC held a 49% stake. Founded in December 1992, RTC Mobikom was a joint venture between Cable & Wireless (49%), BTC (39%) and Radio Electronic Systems (12%). The company, which launched its mobile operations in September 1995, offered a portfolio of services, including cellular, paging, payphone and Internet services throughout Bulgaria.

The challenge going forward is to transform BTC into a modern, fully competitive organisation, offering a full range of services to its business and residential customers in a liberalised environment.

BTC's mobile operations are managed through a newly-established, wholly-owned subsidiary, BTC Mobile EOOD, Bulgaria's third GSM operator. BTC's mobile arm trades as vivatel and has two main rivals in the Bulgarian market, MobilTel, the market leader, and number-two Greek mobile player GloBul. Founded in 1993, MobilTel AD (better known as M-Tel) became the country's first mobile operator when it launched its GSM 900 services in 1995. Bulgaria's second-largest mobile operator, Cosmo Bulgaria Mobile EAD (better known as GloBul), launched its operations in September 2001 after state-run Hellenic Telecommunications Organisation SA (OTE) won a 15-year, GSM 900 / 1800 mobile telephony licence in Bulgaria for USD 135 million. Cosmo Bulgaria Mobile, a wholly-owned subsidiary COSMOTE Mobile Telecommunications SA (a member of Greece's OTE Group).

BTC Mobile was established in June 2004 when BTC received a GSM licence by the country's Communications Regulation Commission. In May 2005, BTC was granted a licence for the construction of 3G mobile telecommunications systems under the UMTS standard, B Class (2 x 5 + 5 MHz). The licence is issued for a 20-year term after BTC pays the licence fee totaling BGN 42 million. In June 2005, BTC Mobile signed contracts for mutual connections with the other two mobile networks in Bulgaria.

Advent International has taken clear and concrete social and financial commitments, according to the Bulgarian Privatisation Agency. The agreement came after a time-consuming, feet-dragging process of almost two years, in which Advent International, through Viva Ventures, won the tender process in October 2002, with contracts negotiated and initiated in March 2003.

On December 1, 2005, Advent International and Novator came to an agreement that gives the latter the option to buy all the shares in Vienna-based Viva Ventures, which has a 65% share in BTC and 100% in BTC Mobile (vivatel), its wireless subsidiary.

"The BTC has been notified that Advent International and Novator Telecom Bulgaria have reached an agreement that gives Novator the option to buy all the shares in Viva Ventures," BTC said in a media release.

The agreement is subject to approval from the relevant authorities, while the price was not disclosed. According to sources, the deal is valued at EUR 620 million. Other sources cited by Reuters believe the transaction could be worth in excess of EUR 1 billion.

"I have a strong belief in BTC and the Bulgarian telecom sector," Bjorgolfsson said, commenting on the signing of the agreement. "With our able employees lead by CEO Dennis Wallach, we have come far in a relatively short time. I am convinced that BTC and vivatel will play a vital role in the competitive development of telecoms in Bulgaria and even further afield."

In a statement, BTC said, "BTC and vivatel would welcome the possibility of an eventual increase of Thor Bjorgolfsson's level of investment in Viva Ventures, as he is one of the largest foreign direct investors to Bulgaria and a strategic investor in the telecom sector in Finland, Poland, the Czech Republic and Greece in addition to Bulgaria with a proven track record. This would be clear evidence for the confidence in BTC's and vivatel's strategy, management and personnel geared towards providing better services to Bulgarian citizens at a fair price."

If successful, the acquisition of a majority stake in BTC and a 100% participation in BTC Mobile (vivatel) will make Bjorgolfsson the largest -- and arguably most powerful -- foreign private investor in Bulgaria.

In 2000, the Bulgarian government rejected a bid of USD 610 million for 51% in BTC by a consortium of state-run Hellenic Telecommunications Organisation SA (OTE) and KPN of The Netherlands.

In addition, BTC is a minority shareholder in Bulgarian Post Bank AD, in which Cyprus-based ALICO/CEH Balkan Holdings Ltd. (ACBH) has a 91.71% stake. ACBH is controlled by Athens-based EFG Eurobank Ergasias SA.

Advent International has been investing across Central Europe since 1994 and has made over 40 investments in the telecommunications sector world-wide, including ESAT Telecom in Ireland, Cesky Mobil a.s. in the Czech Republic (which was granted a GSM 900/1800 licence in October 1999 and launched its commercial operation under the brand name "Oskar" in March 2000; Advent successfully exited this investment in the first half of 2005 achieving more than 3x multiple of the original investment), Connex in Romania and ItalTel in Italy. Since then, the firm has set up several regional investment funds and invested a significant amount of money in growing companies. In the Czech Republic and Slovakia Advent operates through its affiliate, Genesis Capital s.r.o. Advent has branches in Hungary, Poland and Romania.

Bulgaria's Economic and Investment Bank (EIBank)

In September 2005, London-based investment fund Novator International Ltd., through Vienna-registered Novator Bulgaria Holding GmbH, announced that it would acquire a 34% stake in EIBank (Economic and Investment Bank PLC), Bulgaria's ninth-largest bank. Incorporated in 1994 as Bulgarian Russian Investment Bank PLC, EIBank posted first-half 2005 net earnings of BGN 1.62 million, down from BGN 7.13 million in H1 2004. The bank's assets rose to BGN 974.5 million at the end of June 2005, a 45.3% increase year-on-year. EIBank has been issuing debit cards since 1998, while since 2000 the Sofia-based bank has been a member of MasterCard and has been issuing credit cards. Tzvetelina Borislavova is EIBank's Chair of the Supervisory Board. EIBank was one of the first international financial and investment institutions to be established in the country.

Novator's purchased 18.27% of EIBank on January 13, 2006 and will increase its share in the Bulgarian bank to 34% once EIBank will proceed with a share capital increase from BGN 56 million to BGN 69.72 million. Novator reportedly will further increase its participation in EIBank to 50% in early 2007.

Bulgaria's EU accession continues to provide a policy anchor, which has helped strengthen economic fundamentals during 2004 and the first half of 2005. Indeed, tight administratively-set credit measures and a prudent fiscal policy subdued a very strong domestic demand, dampened inflationary pressures and narrowed the still large current account deficit. The moderation of domestic demand was more than offset by an impressive rise in exports of goods and services, leading real GDP growth to its highest level over the past four years. This benign operating environment permitted a further strengthening of bank fundamentals. Indeed, profitability has risen to high levels, supported by rapid loan growth, especially in retail banking and still healthy credit spreads. However, a lack of liquidity has become a major constraint to lending growth, while costs are growing rapidly reflecting the rapid expansion of operations, according to state-run National Bank of Greece SA (NBG), which owns 89.9% of United Bulgarian Bank AD (UBB).

In an environment of tighter credit conditions and increasing competition, especially for funding, net interest margins are set to decline further, posing a challenge for profitability. This should lead banks to focus more on non-interest earnings (brokerage, asset management, insurance, and leasing) and improving their efficiency through the rationalisation of their operating expenses, according to NBG. 

The majority of Bulgaria's 35 banks are privately-owned and subsidiaries of foreign banks, while only one majority publicly-owned bank operates in the country.

Novator International is beneficially owned by Bjorgolfsson. A newly-established, London-based private equity firm founded and led by Bjorgolfsson, Novator Ltd. manages Novator, an investment fund registered in the Cayman Islands with a primary focus on making investments in the telecommunications, pharmaceuticals and financial services sectors.

Bulgaria's "Investor of the Year 2005"

On December 16, 2005, the Bulgarian State Radio nominated Bjorgolfsson the country's "Investor of the Year" for 2005. His company, Novator, recently invested ISK 100 billion in BTC, Icelandic National Broadcasting Service reported, adding that Novator also acquired a 34% stake in EIBank.

Novator Finland Oy / Elisa Corporation

Novator Finland Oy, which is ultimately owned by Novator International, has been eyeing Espoo-based Saunalahti Group Oyj, the leading Finnish virtual mobile operator with a customer base of almost half a million subscribers. Novator International has been looking for a European platform for a MVNO roll-out in order to benefit from the upcoming number portability reform. This platform was initially found in Saunalahti. Bjorgolfsson sees the opportunity of investing in Finland as a possibility to enter the most dynamic and vibrant mobile market in the world.

Saunalahti provides world-class technological know-how, skills, and telecom marketing knowledge. Saunalahti also has a proven track record of being a small and resourceful competitor being able to challenge the ever-changing environment. Saunalahti has also the potential of being a partner in building an international telecom corporation. Saunalahti is an Internet and teleoperations company focusing on Internet and teleoperator activities in Finland. The Group offers Internet and telecommunications services for consumer customers under the brand name Saunalahti and for corporate customers under the brand name EUnet Finland. In 2004, the Saunalahti Group's turnover was EUR 160.9 million. The Group employed approximately 260 people at the end of 2004.

Novator Finland had launched a EUR 1.90 per share public offering in May 2005 for all the shares in Saunalahti. But on July 8, Elisa Oyj announced that it would make a public share exchange offer for all the shares and options in Saunalahti by August 31, 2005. According to the terms of this share exchange offer, Elisa is offering one Elisa share for 5.6 Saunalahti shares.

During his visit to Finland early July 2005, Bjorgolfsson mentioned that the offer from Elisa was good for all shareholders of Saunalahti and it will improve the service to Saunalahtiís customers. He was also impressed by Elisa's quick move in the consolidation process and effective decision-making procedures, which convinced him that there is a kind of "entrepreneurial enthusiasm" in the company that is vital for any competitive corporation in the mobile market.

On November 23, Elisa announced that it owned a total of approximately 97.4% of Saunalahti's shares. Novator is currently Elisa's  largest shareholder with a 10.30% stake (as at November 30, 2005). On November 14, Elisa announced that Saunalahti is now part of Elisa Group. "At the end of March 2006, we will have a joint plan of developing our services and competitive edge with Saunalahti," Veli-Matti Mattila, Elisa's CEO, said in a company statement. "As a premise, all current services of Elisa and Saunalahti will remain. In addition, we will make strong outlays on new services. Our high quality, comprehensive network provides a good foundation for this."

Listed on the Helsinki Stock Exchange (OMX) since July 1, 1999, Elisa offers mobile communications services to private and corporate customers through its own network in Finland and Estonia. The service provision is supported by a comprehensive retail network, which consists of Elisa's own retail outlets and a network of representatives. The Finnish company offers fixed network-based voice and data services to private, corporate and institutional customers, and operators in Finland. Elisa's service portfolio also covers ICT solutions, Nordic and international communication services and a wide array of contact centre services.

On May 18, 2005, Novator and Ajanta Oy entered into a shareholders' agreement, which granted Novator the right to use the votes pertaining to the shares in Saunalahti owned or controlled by Ajanta. As at November 30, 2005, Ajanta is the third-largest shareholder in Elisa with a participation of 1.55%.


Novator Equities Ltd. is currently battling to gain control of Athens-based FORTHnet SA, one of Greece's main ISP (Internet Service Providers) providers and leading alternative carriers. But Intracom SA, the largest manufacturer of telecommunications equipment and information systems in South-East Europe, is also keen on taking over FORTHnet. On September 29, 2005, Intracom announced a public tender offer to gain control of FORTHnet and mentioned that it would bid for up to 4,565,740 shares of FORTHnet at EUR 8 per share.

On August 5, 2005, Intracom announced that it had signed a pre-agreement to fully acquired Hellas On Line SA (HOL), a subsidiary of EFG Eurobank Ergasias SA and one of  FORTHnet's ISP competitors, subject to approvals and to completion of the relevant legal and financial due diligence processes.

Analysts believe FORTHnet currently controls approximately 5% of the Greek fixed-line telecommunications market, while its ISP market share in Greece is estimated to be around 25%.

FORTHnet has a share capital of EUR 19,499,850.46. Its three major shareholders currently are the Foundation for Research and Technology - Hellas (FORTH), one of Greece's largest research centres (20.65%), Intracom (24.81%) and Novator Equities (22.25%), while the rest of the share capital is owned by the investment public through the Athens Exchange (ATHEX; ticker: FORTH) and FORTHnet's company employees and associates.

After acquiring a 16.13% stake in FORTHnet, i.e. 2,718,774 shares (when Telecom Italia and Cyprus Development Bank Ltd. (CDB) sold 1,056,199 and 1,662,575 shares, respectively), and gradually raising its stake through the acquisition of more shares.

FORTHnet was founded in 1995 by Heraklion, Crete-based FORTH and ATHEX-listed passenger shipping firm Minoan Lines Shipping SA, also headquartered in Heraklion.

It was the first company to introduce the Internet to Greece and today offers a full range of telecommunication services to business and retail clients. Although starting to catch up, the country has the lowest Internet penetration rate in western Europe. FORTHnet is not the biggest ISP provider -- it is one of the larger Greek ISPs, OTEnet SA is the biggest -- but the firm currently offers a wide range of Internet services, such as access services (via PSTN, ISDN and ADSL networks, permanent connections and pre-paid access time card), telecommunications services (LMDS, VPN - Virtual Private Networks, etc.), information services (S.MA.R.T., WebSMART programmes for on-line information), value-added services (search engines, on-line directories and the DriveMe on-line mapping portal), etc.

Following the liberalisation of the Greek telecommunications market on January 1, 2001, an increasing number of new players entered the market and started competing with the incumbent OT,E particularly on services such as long-distance national and international calls. The very great majority of Greek new entrants offer their services via indirect access and have contributed to a steady decline on international call prices over the last few years and introduction of different rates for international calls terminating to fixed or to mobile networks, according to Tarifica @ Access Intelligence LLC, an independent telecommunications research body and consultancy with a long history as a centre of expertise in the pricing arena. FORTHnet obtained its fixed-line telephony licence in Greece, allowing the company to offer international, long-distance and local voice telephony services to both business and residential customers. The company launched its fixed-line services in 2002.

FORTHnet offers its clients tailor-made solutions and has developed its privately-owned network Wireless Local Loop network, offering its customers -- through the use of the Local Multipoint Distribution Services (LMDS) technology -- high-speed Internet connections (fast Internet), voice transmission as well as advanced services such as teleconferencing of high video image quality and multimedia applications, not only to businesses but also to high-end residential users.

On July 23, 2001, Alcatel was selected to provide its industry leading LMDS solution to Mediterranean Broadband Access SA (MBA), a fixed wireless operator in Greece that was jointly formed by FORTHnet and the Telecom Italia Group. MBA was awarded a licence for the use of a block of Wireless Local Loop (WLL) frequencies in the 26 GHz band throughout Greece.

A new, privately-owned wired STM1 circuit (155 Mbps) became fully operational on February 10, 2005. The following month, FORTHnet commissioned four additional privately-owned 155 Mbps wired circuits. These five new private STM1 Internet circuits (155 Mbps each) and the four existing circuits bring the company's total capacity to 1,395 Mbps (9 x 155 Mbps).

FORHnet's investments in infrastructure upgrades are in line with the increasing demand for its services. During these broadband access times and 'over IP' applications, FORTHnet is making investments that guarantee uninterrupted high-speed broadband service provision for data, voice, and video transfer and other advanced applications, for its clients.

At the same time, the company is constantly upgrading its internal network backbone; the recent operation of an additional circuit on the Athens-Thessaloniki line, bringing connection speeds between the two cities to 310 Mbps. Additionally, the company has a permanent 155 Mbps connection to the Athens AIX (Athens Internet eXchange) Hub, through which it exchanges Greek Internet traffic with the other ISPs. 

FORTHnet's sophisticated Internet services are supplemented by more specialised solutions through the company's HellasNet business unit, which specialises in interactive marketing services such as on-line advertising (strategy, creative, media buying and planning; Web campaigns, E-mail campaigns, search engine marketing, micro-sites), Web site design and development (content management, E-commerce, on-line booking, investor relations Web kit, intranet-extranet) and mobile marketing (SMS & MMS applications, development of i-mode sites).

In October 2000, FORTHnet became the first Internet company in Greece to be listed on the Athens Exchange (ATHEX ticker: FORTH).

In December 2003, the company acquired Internet Hellas SA, a smaller ISP competitor, which has now become FORTHnet's business unit specialising in data-centre services.

FORTHnet is also active in coastal shipping, through its FORTHcrs unit, which develops on-line reservation and ticketing services. Established in December 1999, FORTHcrs is specialised in the provision of integrated services within the tourism sector, research and development, the operation and marketing of electronic products as well as distribution and management of services related to tourism, based on convergent up-to-date technology. Tourism services can include reservations of seats, ticket issuing or ticket allotment, and any process that is created by transportation, hotel or any type of tourism services.

In summer 2001, FORTHcrs generated, designed and applied SeaConnect, the first distribution system of electronic bookings within the ferry sector. SeaConnect currently links the reservation systems of all the Greek coastal shipping companies in Greece, through the integrated interface OpenSeasTM, which is the interface of a network of 1,200 agencies throughout Greece and overseas.

In addition, FORTHnet was the first Greek company to offer customers the possibility to choose their telecommunications provider by offering a complete fixed-line telephony services package known as "FORTHnet Telephony". These services are provided either by pre-selecting a carrier or using FORTHnet's four-digit provider selection code (1789) or through a permanent connection (Direct Access services) or via Smartalk, FORTHnet's pre-paid telephone card.

The Athens office of Norton Rose, a leading international law firm with a network of offices in Europe, the Middle East and Asia, is legally representing and advising Novator Equities on its takeover of FORTHnet. Norton Rose's Greek practice is headed by its Managing Partner, Chris Hobbs.

Athens-based Intracom was founded in 1977, has been listed on the ATHEX since 1990 and is included in the FTSE/ASE 20 index. The Intracom Group has 5,450 employees and offers its products and services in 60 countries, mainly focusing on the European Union, North Africa, the Middle East and the USA. Outside of its domestic market, Greece, Intracom has subsidiaries in 16 countries. Socrates P. Kokkalis, founder of the Intracom group of companies, is the majority shareholder of "Olympiacos", one of the country's major soccer teams and sport clubs, and one of the most influential businessmen in Greece. The Intracom Group posted fiscal-year 2004 revenues of EUR 620.4 million on earnings before tax of EUR 42.6 million. International activities account for 45.3% of the Intracom Group's annual revenues.

It should be noted that Intracom sold its 66% participation in Sofia-based Bulfon SA to Bulgarian Telecommunications Company (BTC) for an undisclosed price, according to an official announcement sent to the Athens Exchange (ATHEX) by the Greek telecommunications equipment manufacturer on May 27, 2005. Bulfon was established in 1995 as a 34%/66% joint-venture between BTC and Intracom SA to develop, produce and implement modern telecommunications equipment in Bulgaria. Over the past decade, Bulfon has been developing, installing and managing a nationwide network of public card payphones throughout the country, using chip-cards as a means of payment. Bulfon currently has more than 8,000 phones in 350 cities, towns and villages in operation throughout Bulgaria.

Novator, London

Novator Partners LLP
Novator Ltd.
Novator Equities Ltd.

25 Park Lane, 6th Floor, Mayfair
London W1K 1RA
Tel.: +44 207 647 1500
Fax: +44 207 647 1520
Novator (Iceland), Reykjavik:
Tel.: +354 414 6000 (Samson Holding ehf.'s switchboard)

Regulated by the FSA, Novator Partners LLP is a London-based investment fund which belongs to a group of companies owned by Thor Bjorgolfsson. Among other activities, Novator Ltd. manages the investment fund Novator One LP, an exempted limited partnership formed in the Cayman Islands (registered office: PO Box 309GT, Ugland House, South Church Street, George Town, Grand Cayman, Cayman Islands). Novator Partners LLP is a member of the British-Icelandic Chamber of Commerce.

Key Novator executives

Bjorgolfur Thor Bjorgolfsson
Björgólfur Thor Björgólfsson

  • Thor Bjorgolfsson, Chairman of the Board

Constantine Gonticas
Constantine Gonticas

  • Constantine S. Gonticas -- who is the nephew of George C. Gondicas, Honorary Chairman of the Board and Non-executive Director of ATHEX-listed EFG Eurobank Ergasias SA -- holds the position of Managing Partner of Novator Partners LLP. He serves also as Deputy Chairman and Non-executive member of the Board of Directors of ATHEX-listed FORTHnet SA (Greece), Board Member of Be Unlimited (UK) and Millwall Holdings PLC (UK) and Supervisory Board Member of P4 Sp. z o.o. (Poland) and Prague-based Czech Radiocommunications (České radiokomunikace, ČRa) (Czech Republic). He also serves as a member of the Supervisory Board of Netia SA, Poland's largest alternative provider of fixed-line telecommunications services. During 1988-2000 he was employed at Credit Suisse First Boston (CSFB), London. Between 2000 and 2004 he worked for Merrill Lynch, also based out of London, as a director of investment banking responsible for M&A activity in emerging Europe, the Middle East and Africa. Since 2004 he has been employed at Novator Partners LLP, London. On December 30, 2005, he was appointed as Non-executive Director of Millwall Holdings PLC (MWH; Millwall Football Club). He also serves as a Director  of Exotika Fusion Food Limited and Wikira Ltd.. Born in 1966, Gonticas graduated in Law from Oxford University in 1988.

Bruce McInroy
Bruce McInroy

  • Bruce McInroy serves currently as a Partner of Novator LLP, the London-based investment manager which specialises in telecoms, financial services and generic pharmaceuticals. Novator has a particular focus on emerging Europe. McInroy joined Novator in May 2004 to concentrate on investments in the telecommunications and technology sectors. He is a member of the Supervisory Board of P4 Sp z o.o., the fourth mobile telephone operator in Poland which was awarded a 3G licence in 2004; a Director of Be Un Limited, the UK high-speed broadband operator; and a Director and Non-executive member of the Board of Directors of FORTHnet SA, the leading Greek broadband telecoms company, listed on the Athens Exchange (ATHEX). McInroy is also a Non-executive Director of QXL ricardo PLC (QXL to be pronounced as "quick sell"), the Parsons Green, London-based, pan-European on-line auction house (he was appointed interim Chairman on February 2, 2006 and joined the board as a non-executive director on January 12, 2006). Furthermore, he serves as a member of the Supervisory Board of Netia SA. He started his professional career as an engineer with British Telecom, followed by equities research in London in UK and European electronics and telecoms sectors, followed by investment banking with Deutsche Bank and Merrill Lynch, specialising in the telecoms sector. Bruce McInroy graduated from Cambridge University, England, with MA, Honours, in Computer Science.

Last updated: January 20, 2006. ISK = Icelandic krona. BGN = Bulgarian lev.

Please note: The information in this profile has been compiled by INVgr and obtained from numerous on-line and off-line sources deemed to be authoritative. However, if you wish to add any information to this profile or make any suggestions and/or corrections, contact INVgr.

[Top of Page]

Advertising   |  Guest Book  |   E-mail  |  Disclaimer
Registration Terms  |  Subscription Form