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AS Trigon Property Development
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12.12.2007 14:05:00
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TPD: The Way Forward
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Following the meetings held on December 11, 2007, AS Trigon Property Development (‘TPD') hereby announces that subject to receiving the necessary remaining approvals with respect to the relevant detail planning, it intends to call an Extraordinary Shareholders' Meeting at the beginning of February 2008 to obtain shareholder approval for the share issue which would be structured so as leave TPD in control of a property development project which will be known as “Gate Tallinn”. The Gate Tallinn project comprises a 620,000 sqm land area located adjacent to the Tallinn city border, at the cross-roads of the Via Baltica and the planned inner ring-road of Tallinn. The project which has been worked on for almost three years by Trigon Capital involves building rights of around 240,000sqm, of which approximately 115,000sqm would be dedicated to creating the largest Baltic retailing mega-centre for large-format retailing concepts, the rest will be devoted to warehousing, logistics and office space. This novel concept is increasingly popular internationally but has not yet been present in the Baltic states. Elektriraudtee plans to establish a new train station in connection with the project for which also new road connections have been agreed with Maanteeamet. The project will involve the creation of new jobs and road connections from which all nearby local governments will benefit. All tenanting related work in Gate Tallinn has been mandated to Colliers International (www.colliers.com) who is currently marketing the project to potential tenants through its international offices. . The early response from potential tenants, including major international retailers, has been very favorable. The conceptual and architectural work on the Gate Tallinn concept has been carried out by leading Scandinavian property consultants: TP-Group (www.tpgroup.com) and CEJ Architects (www.cej.com). Further details on the Gate Tallinn project and the planned first Baltic retail development power-centre can be obtained by downloading the presentation from the following web link:http://www.trigonproperty.com/upload/Gate_Tallinn_20071212pdf.pdf The Gate Tallinn project is currently owned by OÜ Chester Universal whose shareholders are willing to contribute their holdings in the said company to TPD in exchange for shares in TPD. For that purpose new shares in TPD need to be issued to the shareholders of OÜ Chester Universal. The Extraordinary Shareholders Meeting of TPD will be called to effect this. The target date for the Extraordinary Shareholders' Meeting of TPD to approve the planned new share issue is February 4, 2008. The proposed share issue size will be around EUR 75.9-127.3 million. As part of the new share issue the existing shareholders will be given the right to subscribe for new shares in TPD in cash in proportion to their current shareholding in TPD (so that they can retain their ownership percentage in the company if they so wish). OÜ Trigon Wood (currently owning 59.62% of TPD) will not subscribe for its part of the new share issue. This secures that a sufficient amount of new shares will be available for subscription by the shareholders of OÜ Chester Universal. The corresponding allocation of new shares, subject to approval by the shareholders of TPD, will be subscribed instead by the shareholders of Gate Tallinn (currently incorporated as OÜ Chester Universal) with a non-monetary contribution consisting of their shares and shareholder loan-notes in Gate Tallinn. The value of the non-monetary contribution will be determined on the basis of an independent expert opinion provided by Colliers International. The management will also propose to shareholders that the share issue would be carried out at a price per share which shall be equal to the higher of the following: (i) the net asset value per share derived from the value of the current property holdings of TPD (the Niidu land area) as determined by Colliers International, or (ii) the 2-week weighted average share price of the TPD share on Tallinn Stock Exchange before the date of the Extraordinary Shareholders' Meeting of TPD. Colliers International has valued the Niidu land area at EUR 8.3 million and the Gate Tallinn project at EUR 77.9 million. Taking into account existing liabilities the Net Asset Value (“NAV”) of TPD is roughly EUR 8.1 million and the NAV of OÜ Chester Universal is roughly EUR 75.9 million.. Following the completion of the planned new share issue it is the intention of the management to immediately start preparations for a second share issue that targets interested international investors. The purpose of the second share issue is to raise funds for carrying out further investments in the Baltic real estate development sector with the aim of taking advantage of the current opportunities which are increasingly becoming available at depressed price levels given the slow-down in the Baltic property sector. Ülo Adamson Chairman of the Supervisory Board AS Trigon Property Development