Market announcement

Title

Loan agreement concluded by AS Kalev Paide Tootmine. Collateral agreements concluded

Message

Loan agreement

AS Kalev Paide Tootmine and OÜ Põlva Piim Tootmine (company acquired by AS
Kalev Paide Tootmine) have signed a joint loan agreement with Nordea Bank
Finland Plc Estonia branch (hereinafter: Nordea Bank) and Bank DnB Nord A/S
Estonia branch (hereinafter DnB Nord). 

The agreement was concluded for a loan in the total amount of 713,484,960 EEK
(45,600,000 EUR), of which 603,958,760 EEK (38,600,000 EUR) will be used by AS
Kalev Paide Tootmine to acquire stakes in OÜ Põlva Piim Tootmine and Tere AS.
The remaining 109,526,200 EEK (7,000,000 EUR) will be used for refinancing the
financial obligations of OÜ Põlva Piim Tootmine. The agreement serves the
purpose of financing the acquisition of the stakes in OÜ Põlva Piim Tootmine
and Tere AS by AS Kalev Paide Tootmine. 

The loan sum disbursement shall be subject to the standard preconditions
applicable for contracts of this particular type, including completion of the
transaction of the acquisition of the stakes of Tere AS and OÜ Põlva Piim
Tootmine as well as conclusion of collateral agreements. Specific preconditions
for the transaction include AS Rubla's obligation to reduce financial
liabilities, AS Kalev Real Estate Company's obligation to transfer its stake in
OÜ BCA Center, an increase of the share capital of AS Kalev Paide Tootmine and
the obligation of AS Kalev Paide Tootmine and AS Tere to conclude additional
loan agreements in the total amount of 46,783,334 EEK (2,990,000 EUR). 

The loan agreement establishes a standard collateral for loans of the
particular type (see below). AS Kalev Paide Tootmine and OÜ Põlva Piim Tootmine
shall guarantee to the bank the fulfilment of mutual obligations. An additional
guarantee shall be provided by AS Rubla. 

Repayment of 603,958,760 EEK (38,600,000 EUR) of the loan portion used for
acquiring the stakes of OÜ Põlva Piim Tootmine and AS Tere shall commence in 
the tenth month after the date of disbursement of the loan portion. A total of
75 monthly instalments shall be made, with 74 instalments of 5,441,887.48 EEK
(347,800 EUR) and the last instalment of 201,259,086.48 EEK (12,862,800 EUR).
Interest payments shall commence in the first month after the date of
disbursement of the loan portion. The annual interest rate of the loan portion
is 7.6%, tied to the 3-month EURIBOR. 

Repayment of the 109,526,200 EEK (7,000,000 EUR) loan portion used for
refinancing the financial liabilities of OÜ Põlva Piim Tootmine shall commence
in the fourth month of the date of disbursement of the loan portion. A total of
81 monthly instalments shall be made, with 80 instalments in the amount of
936,449 EEK (59,850 EUR) and the last instalment of 34,610,279 EEK (2,212,000
EUR). Interest payments shall commence in the first month after the date of
disbursement of the loan portion. The annual interest rate of the loan portion
is 6.6%, tied to the 3-month EURIBOR. 

Collateral

In order to guarantee fulfilment of the liabilities arising from the loan
agreement, AS Kalev Paide Tootmine concluded agreements on the assignment and
transfer of mortgages as well as mortgage agreements establishing mortgages on
AS Kalev Paide Tootmine's registered immovables for the benefit of Nordea Bank
and DnB Nord. Similar agreements were also concluded by AS Kalev Paide
Tootmine's subsidiary Valmetek Invest AS. 

With the agreements, the mortgagee assigned to Nordea Bank the mortgages
established for the benefit of the mortgagee on the registered immovable in the
common ownership of AS Kalev Paide Tootmine and Valmetek Invest AS (located at
Prääma tee 11 and Prääma tee 11b in Paide). Mortgages in the total amount of 70
million EEK (4.5 million EUR) were assigned to Nordea Bank. In addition a
combined mortgage in the amount of 296 million EEK (18.9 million EUR) was
established for the benefit of Nordea Bank on the above registered immovables
(i.e. for the legal shares of both co-owners), as well as a 40.7 million EEK
(2.6 million EUR) mortgage for the benefit of Nordea Bank and an equal mortgage
for the benefit of DnB Nord. 

The combined mortgage established for the benefit of Nordea Bank also encumbers
the registered immovables of OÜ Põlva Piim Tootmine, which are to be acquired
by AS Kalev and are located at Vabriku 1c, Savi 6c, Jaama 20, Jaama 20b and
Jaama 20c (all in Põlva) and a legal share of Tere AS in the registered
immovable located at Raua 6 in Viljandi. 

With the agreement, the mortgage established in the amount of 140 million EEK
(8.9 million EUR) on the above registered immovables, which are held by OÜ
Põlva Piim Tootmine in Põlva and are to be acquired by AS Kalev Paide Tootmine,
were transferred to Nordea Bank. 

Simultaneously with the mortgage agreements, the following agreements were
concluded on the assignment and establishment of commercial pledges. 

A commercial pledge established on the assets of AS Kalev Paide Tootmine in the
amount of 52 million EEK (3.3 million EUR) was assigned to Nordea Bank. 

A commercial pledge established in the amount of 40 million EEK (2.6 million
EUR) on the property of Tere AS and a commercial pledge established in the
amount of 55 million EEK (3.5 million EUR) on the property of OÜ Põlva Piim
Tootmine were assigned to Nordea Bank.. In addition, new commercial pledges
were established for the benefit of Nordea Bank—a commercial pledge on the
property of Tere AS in the amount of 182 million EEK (11.6 million EUR) and a
commercial pledge on the property of OÜ Põlva Piim Tootmine in the amount of 97
million EEK (6.2 million EUR). 

The above mortgages (except for the 40.7 million EEK [2.6 million EUR]
mortgages for the benefit of Nordea Bank and DnB Nord) and commercial pledges
serve to guarantee the requirements of Nordea Bank, arising from the syndicated
loan agreement concluded between pledgors and banks as well as from its
possible annexes and/or amendments and/or the pledgee's future claims arising
from the loan agreement. 

The 40.7 million EEK mortgages established for the benefit of Nordea Bank and
DnB Nord serve to secure the bank's claims arising from the contracts under the
law of obligations which have been concluded or will be concluded by the
pledgors and the corresponding bank, except for the above syndicated loan
agreement. 

For the purposes of this press release, the exchange rate between EEK and EUR
has been fixed at:1 EUR = 15.6466 EEK 

Allan Viirma
Head of legal service
AS Kalev 
Telephone: 688 6616