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CORRECTION: 09.11.2010: Arco sold its claim against Ühendatud Kapital AS.

Teade

Arco Vara AS stock exchange announcement included a mistake in heading
(09.09.2010: Arco sold its claim against Ühendatud Kapital AS), an announcement
with correct heading and the same content follows. 

09.11.2010: Arco sold its claim against Ühendatud Kapital AS.


Arco Investeeringute AS, a 100% subsidiary of Arco Vara AS, transferred its
claim against Celia Crowd AS (former name Ühendatud Kapital AS) to AS EMF
Invest. 
The value of the transaction is 52,000,000 Estonian kroons (approx. 3,323,406
euro) as a result of which the group will earn an extraordinary profit in the
amount of 18,875,000 Estonian kroons (approx. 1,206,332 euro). 
In 2008, Arco Investeeringute AS granted a loan of 10,000,000 USD to AS Sigma
Real Estate Ltd. The loan was secured by AS Ühendatud Kapital. As the loan was
not redeemed, Arco filed an appeal to the Court of Arbitration of the Estonian
Chamber of Commerce and Industry on 18.02.2009. Based on the judgement of the
Court of Arbitration of 21.12.2009, Ühendatud Kapital AS was obliged to pay to
Arco the principal amount of 10,000,000 USD, the interests in the amount of
906,666 USD, the  fine for delay in the amount of 773,698.63 USD and the annual
fine for delay of 8% calculated from 22.12.2009, which amounts to 705,73.30 USD
as of 08.11.2010. Besides that, Ühendatud Kapital AS was obliged to indemnify
the costs of the Court of Arbitration in the amount of 1,099,417.20 Estonian
kroons. As of 08.11.2010, the total claim amounts to 137,868,170 Estonian
kroons (approx. 8,811,382 euro). 
Arco has initiated several legal proceedings for calling in the claim,
including filing for bankruptcy of Ühinenud Kapital AS that had become a
company without assets in the meantime; also, Arco has contested several
procedures of execution proceedings with the assets of Ühendatud Kapital AS. In
total, Arco has 5 ongoing court proceedings related to Ühendatud Kapital AS.
Considering the fact that most of the court proceedings have been in process
for almost a year and that in most important proceedings, no decision of the
court of first instance has been achieved, the proceedings will estimatedly
another three to five years. Considering the fact that Ühendatud Kapital AS has
become a company without assets in the meantime, it is not likely that the
claim of Arco will be satisfied to a considerable extent during the bankruptcy
proceeding. 
In the Arco balance sheet, the 2009 claim against Celia Crowd AS has already
been written down to a value of 3,000,000 USD (approx. 33,126,000 Estonian
kroons, approx. 2,117,137 euro). 
Considering the above, the Management Board of Arco deemed it economically
reasonable to transfer the claim. 
Established in 1992, Arco Vara is one of the leading property development
companies in the Baltic countries. The main activity of the company is property
development, supported by real estate brokerage and valuation, construction and
property management. The company has offices in 17 cities in Estonia, Latvia,
Ukraine and Bulgaria. The group employs approx. 160 people. 
1 EUR=15.6466 EEK 
Lembit Tampere 
Member of the Management Board 
Arco Vara AS 
Tel: +372 614 4630 
[email protected] 
http://www.arcorealestate.com/