Due to the emergency situation in the Baltic States until at least May 1, 2020,
EfTEN Real Estate Fund III AS announces that the Fund's general meeting is
expected to take place in June this year. The Fund will announce the exact time,
place and agenda of the general meeting through a stock exchange release and the
newspaper "Postimees" by May 31th, 2020 at the latest.
The Fund Manager is managing the potentially negative economic impacts and
mitigating the risks due to the COVID-19 and the state of an emergency on a
daily basis, and if necessary, enters into additional temporary lease agreements
with tenants. The goal of the Fund is to keep a close contact with tenants, find
solutions to encountered difficulties, and to minimize as much as possible
monthly operational costs of the Fund until the end of the state of an
emergency. To achieve this goal, we also actively communicate with the banks to
ensure that the lenders are properly informed about the potential economic
impact of the crisis measures. We are also taking steps to agree the temporary
grace periods to postpone the monthly loan principal repayments. The Fund has a
consolidated cash balance more than EUR 10 million in bank accounts and short-
term deposits, of which the planned dividend including income tax expense is EUR
3.7 million and not yet invested capital, raised from latest share issue, is EUR
4.3 million. Currently, the Fund does not have any large-scale development
projects other than the construction of KFC stand-alone building on the site of
the Saul?s Mestas Shopping Center in Shiauliai with total budget of 600 thousand
euros. Fund Manager considers the liquidity buffer to be sufficient also in the
potential long-term development of the crisis.
On the basis of information available, the negative influence of the state of
emergency on the commercial real estate sector will be expected mainly in the
hotel and larger shopping centers. EfTEN Real Estate Fund III AS owns a large
shopping center in Shiauliai, Lithuania. The Fund does not own any hotels.
According to the decision of the Lithuanian Government, shopping centers are
closed, except for grocery stores and pharmacies. Out of the 115 tenant spaces
in Saules Miestas, 14 are currently open, including the centre's anchor tenant's
RIMI grocery store. The Fund does not have large shopping centers in Estonia and
Latvia. The Fund will publish more detailed financial information on the impact
of the temporary agreements on the Fund's rental income with the announcement of
the Fund's net asset value by 13 April 2020 at the latest.
Although the Fund Manager believes that the merger of EfTEN Real Estate Fund III
AS and EfTEN Kinnisvarafond AS is in the long-term interest of the shareholders
of both Funds, it has been decided to suspend the merger activities and to
terminate the merger agreement. The merger of Funds requires a stable economic
environment and a clear financial outlook for the future of the both funds'
assets. We plan to return to the merger subject in next year, when the economic
outlook for the Baltic States is expected to stabilize.
Viljar Arakas
Member of the Management Board
Phone 655 9515
E-mail: viljar.arakas@eften.ee (mailto:viljar.arakas@eften.ee)
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