Executive Summary Business Case Naturis

EXECUTIVE SUMMARY

Purpose

Evaluate alternatives and analyze ways to reduce or eliminate the EURIBOR interest rate risk that underlies the recently closed deal with the Italian bank consortium.

Historical view

The current level of the EURIBOR, see Annex 1, seems to be close to the upper level of the maximum range provided by the data. Before the EURIBOR was put in place in 1999, other indicators were used in different countries. A look at the history of the HELIBOR and FRIBOR, see Annex 2, shows that interest rates had reached over 16% in the past.

Towards 1999, these indicators converge below 4% and are molded into the EURIBOR. Assuming that this absorption of local indicators, due to the creation of the European Union, spread the risk between all countries of its members, it is sound to assume that the risk of interest rates going into double digits is low. Considering this, we suggest to concentrate on the data of the EURIBOR and draw the conclusion that the interest rate will decelerate its growth and reverse direction in a near future.

The technical analysis of the EURIBOR data, as depicted in Annex 3, sets the probability of the index going north of 5% at 3,5%, which could be considered rather low. Clearly, this data represents decisions made by a lot of different stockholder in the past and should be considered together with other sources of information.

From another prospective, we looked at the interest rate of the Federal Reserve of the USA in how it moves in relation to its equivalent in Europe. Annex 4 shows that the European rate follows the American one, always lagging a few months behind. At the end of 2007, the Federal Reserve started to lower its interest rate in a move to cool a seemingly overheating economy. According to the history, the European rate should be affected soon and start to follow its American counterpart.

Our conclusion from the previous sources of information and analysis of each is that the potential...