To improve the attractiveness of Tallinn as a tourist destination and to offer
local citizens new recreational opportunities AS Tallink Grupp (the Group), the
Group's largest shareholder AS Infortar and the City of Tallinn signed today a
memorandum of understanding to develop the city owned architectural monument
Tallinn City Hall and its adjacent properties into a top conference and concert
centre in the Baltic Sea region.
The common vision of the parties is to establish an attractive and a wholly
functioning conference and concert centre with an accompanying port, hotel,
business centre and leisure facilities to Tallinn City Hall and its
surroundings. The goal is to create a prominent architectural and recreational
"landmark" open to local citizens and tourists arriving with ferries from the
Baltic Sea area and thus re-opening this seaside area of Tallinn to townspeople
and further increasing the number of tourists visiting Tallinn.
?The City of Tallinn and the Estonian government have long been waiting for a
viable proposal and vision for the listed City Hall concert hall property and a
development proposal for an international conference and concert centre, which
would help give the Tallinn and Estonian tourism sector the development boost it
needs. Estonia desperately needs a conference and concert hall that would seat
5,000 plus guests and would enable bringing large conferences and cultural
events requiring a large and good quality hall to Estonia. In order to
successfully compete with the other capitals in the Baltic Sea region, such as
Helsinki, Riga and Stockholm, Tallinn needs new opportunities for developing
tourism and it needs a big step forward. The inclusion of a new port into this
equation is a key factor which will allow for a profitable operation of the
entire project and will liven up the whole City Hall area," said Paavo Nõgene,
CEO of the Group.
The next steps during the coming months include agreeing on the principles of
cooperation between the parties and setting an activity plan. To carry out the
project the parties will establish a joint venture in which the City of Tallinn
will hold a 34% stake and both the Group and AS Infortar will hold a 33% stake.
Upon establishment, the parties will make initial contributions pro rata to
their shareholding and in the total amount of EUR 1 million. An architectural
competition will be launched for determining the best architectural concept.
The estimated construction period of the new centre and adjoining buildings is
three years from the point when all the necessary permits have been obtained and
all the required contracts have been signed and the total cost of the project is
estimated at approximately EUR 300 million. Conditionally, after completion of
the preparation phase, obtaining all the necessary permits and approvals and on
meeting other pre-conditions, the City of Tallinn will contribute the City Hall
and its adjacent properties to the joint venture and the Group and AS Infortar
will both make EUR 10 million cash contributions. The Group and AS Infortar will
guarantee the necessary capital required for the investments without the City of
Tallinn having any additional financial obligations. The project is expected to
be financed both from equity and from other financial instruments. The project
will not generate income prior to completion and commencement of operations.
Establishment of the joint venture cannot be interpreted as acquiring of a major
holding for the purposes of the Nasdaq Tallinn Rules and Regulations chapter
Requirements for Issuers and does not have a significant impact on the Group's
activities in the current year. The Chairman of the Group's Supervisory Board
Enn Pant is the Chairman of the Supervisory Board of AS Infortar, the Group's
Supervisory Board Members Toivo Ninnas and Kalev Järvelill are members of the
Supervisory Board of AS Infortar, the Group's Supervisory Board Member Ain
Hanschmidt is the Chairman of the Management Board of AS Infortar and the
Group's Supervisory Board member Eve Pant is member of the Management Board of
AS Infortar. The members of the Supervisory Board and Management Board of the
Group have no other personal interest in the transactions.
Joonas Joost
Advisor to the Management Board
Head of Investor Relations
AS Tallink Grupp
Sadama 5
10111 Tallinn, Estonia
E-mail joonas.joost@tallink.ee
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