«We create a new possibility for transportation of passengers and goods along sea routes at aircraft speeds, with high efficiency, with iproved safety and comfort than currently existing crafts provide, by preserving the environment to a maximum level»

SKY & SEA GROUP has developed a business plan on attracting and raising leveraged finances in relation to its innovative project for a High-speed amphibian vehicle Burevestnik-24. The product anticipated as a result from the project development shall provide grounds for establishing transport networks of a new generation, meeting new contemporary demands regarding high-speed, safe, economical, ecological and comfortable sea transportation and creating a new market niche in the field of littoral transport all over the world.

The market our product relates to can be described as emerging, with perspectives of growing and expanding according to the demand of such an innovative service. From a geographical perspective, it is a worldwide market, covering any and all littoral areas of oceans, seas and larger rivers and lakes, irrespective of the climatic zone. Different external sources determine the annual turnover, generated following the sales of this type of crafts to over 5 billion EUR.

Leveraged finances are supposed to be obtained in the form of share participation of strategic partners, or as venture fund investments, bank loans or any combination of those. The overall sums required, including working capital, have been calculated to amount to 550million EUR. The following option has been assessed as the most propitious: an investment in the form of share participation to the amount of 230 million EUR, which should ensure the construction of facilities and commissioning of a mass-production, plus working capital loan to the amount of 320 million EUR, depending on the selected sales method.

Sky & Sea Ltd. shall offer its Strategic Partner a share participation in the incorporated structure to the amount of 50%, whereof, under certain conditions, a greater share can be offered, but the rights on fund (or holding) management shall be obligatorily kept, in as far as it is a necessary precondition for the successful completion of the project and the viability of the structure.

At such a scenario, upon expiration of the six-year project time line (1+5 years), SKY & SEA GROUP shall remain owner of the tangible and intangible assets, amounting to over 500 million EUR, according to initial estimation, whereas the market capitalization shall exceed 1 billion EUR, and the loan shall be repaid by means of selling finished products. The production cycle to be commenced upon project completion, as described in the business plan, shall incur expenses in the annual balance sheet to the amount of 243 million EUR, envisaged to be covered by a revolving loan, whereas the annual balance sheet income shall be 340 million EUR, with incomes from ancillary activities excluded.

With view to the complex and various tasks pending for implementation, SKY & SEA GROUP envisages incorporating fund or holding structures, as described in more details in the business plan. The founders of the Group have managed to set up a unique team of specialists to work on the project implementation, some of whom are unmatched worldwide, based on their experience. This has boosted the management's confidence in the successful solutions and completion of the tasks set.

Main Financial Indicators of the Project:

-   Project completion time line – 6 years

-   Total project value – 790 million EUR.

-   Financing facility required – up to 550 million EUR (230 million share capital and 320 million working capital)

-   IRR of the partner's share capital – 30 %

-   NPV (project) – 264 million EUR.

-   NPV (partner) – 152 million EUR.

- Pay-back period – 6 years

-   Alleged equity participation – up to 50 %

Company Financial Parameters upon Project Completions:

• Annual turnover – 340 million EUR.
• EBITDA– 106 million EUR.
• Annual net profit – 95 million EUR.
• Forecast market capitalization – over 1 billion EUR.
• Return on Equity (RoE) – 26 %

• Return on Assets (RoA) – 25%

The company has set as its aim to set up a facility with sufficient output to release 300 certified vessels annually, providing guarantee and follow-up servicing and securing deliveries to any location worldwide, provide training to certified craft pilots and technical maintenance specialists, as well as carry out upgrades and create and test new prototypes of High-speed amphibia. The facility shall be capable of becoming a main site for the mass introduction of HSA "Burevestnik-24" and any subsequent craft samples onto the transport service market, by means of a multiplication of the production in different locations worldwide, making use of the production and commissioning skills, achieved at this stage and backed up by the professional organization of design, test, production and training structure units.

In order to achieve these objectives, it is deemed necessary to: Establish a design and engineering department and complete the design documentation required for mass production, complete the certification tests of the craft and achieve certificate of conformity, build and assure all equipment for an experimental plant, one serial production facility, a training center for HSA specialists, two test centers, "North" and "South", a main information center, establish a logistics company as well as a test transportation company and develop the regulatory and law documentation on the implementation of high-speed vessels in the World ocean and littoral aquatic areas and have those approved by the respective ministries of the contracting parties in connection with the project implementation.

The project implementation requires investment and working capitals amounting to a total of 550 million EUR. The project implementation time line is 6 years, whereof, upon its completion the company shall have:

• Design and engineering Department (DED);
• Experimental Plant (EP);
• Two test and certification centers (TCC) - "North" and "South";
• A certified personnel training center (PTC);
• A main information center (MIC), which shall receive and analyze the entire information coming from production, test and commissioning processes carried out.
• Certified Serial Production Plant (SPP No. 1) with output of up to 100 vessels annually.
• Full patent and design documentation (PD and DD);
• A certified commercial purposes craft - passenger and freight version;
• Different versions of a certified special purpose craft (patrol, rescue, military and first aid versions);
• Certified crews and technical specialists - as many as might be necessary;
• A series of 19 experimental production crafts, of which 15 shall be used in both TCC for crew-training purposes, whereas 4 shall be used in PR and advertising drives and exhibitions.
• 150 serial production vessels operated for commercial use.
• Experimental transport network (ETN) with proven commercial experience in craft commissioning and use.
• A logistic company (LC) for deliveries of HSA as well as spare parts to any destination worldwide, maintaining high quality standards and safety of vessels.
• Bureau X on elaboration of operation methodology and legal base on the implementation and use of high-speed vessels.
• Berthing and on-shore facilities in key location of craft operation.
• Other assets, connected with the manufacture and operation of HSA: Hotels, trade representations, ancillary establishments, tourist companies, etc.

Sky&Sea is one of the first companies to have developed its product to a stage appropriate for commencement of a mass production of ekranoplans for consumer purposes, thus having a unique chance to take advantage of the principle "First come, first served". The finished products of the first mass-production plant shall realize sustainable annual turnover of 300 million EUR, and a gross net profit of about 90 million EUR, while ancillary incomes are anticipated from crew training, follow-up services and sales of spare parts, expert and consultancy services in the field of manufacture, certification and operation of ekranoplans. Besides, dividends are expected to be generated from participation in joint ventures of operators, participation in various governmental programs, as well as other ancillary activities.