Börsiteade

Pealkiri

AS Tallinna Vesi fulfils the terms of services agreement

Teade

AS Tallinna Vesi (hereinafter the Company) as a company listed on the Tallinn
Stock Exchange notified its shareholders and investment community that the
Company has submitted tariff applications to the Estonian Competition Authority
in line with the tariff agreement contained in the Services Agreement concluded
in 2001. 

This means that the Company has submitted applications for the tariff increases
that were due from 1st January 2011, 1st January 2012, 1st January 2013 and 1st
January 2014. On 10th of February 2014, the Company made a simple notification
to its shareholders confirming that it had fulfilled its contractual obligation
in accordance with the contract. The company did this because the Competition
Authority has taken the decision to publish the latest tariff applications made
by water undertakings. To avoid any confusion for shareholders, i.e.
shareholders may not be clear if the tariff applications were in accordance
with the contract, the Company made this stock exchange announcement. 

The Competition Authority’s decision to start disclosing additional information
on its webpage and the stock exchange announcement triggered by this decision
are independent from and do not influence the pending disputes between the
Competition Authority and the Company. 

The Company believes these tariff applications should be accepted by the
Competition Authority in following reasons: 

  -- they are fully in accordance with the EBRD sponsored privatization contract
     that was approved by the Estonian Government in 2000;
  -- in May 2012 the Estonian Courts have declared that this tariff agreement is
     an administrative agreement (i.e. a public law contract) under Estonian
     law. Therefore, as this is a public law contract, Company and its
     shareholders believe that the Competition Authority should take due respect
     of this fact and respect the Estonian legal system and honor its legal
     obligations.

As a result of all of the above, the company firmly believes that the terms and
conditions of the public law Services Agreement should be honored, especially
when in the current situation only the state institution that regulates the
public law contract has changed – the previous state appointed regulator was
the City of Tallinn (2001 to 2010), the current state appointed regulator is
the Competition Authority (2010-2014). 

Thus, contractually the Company has, in accordance with the tariff agreement,
signed as part of AS Tallinna Vesi’s privatization, applied for a following
tariff increases: 

  -- 3.5% from 01st January 2011;
  -- 4.9% from 01st January 2012;
  -- 3.9% from 1st January 2013;
  -- 3.8% from 1st January 2014.

Which would make a fully compounded tariff increase of 17.1% or an over 50m
Euros of compensation of the Government of Estonia. The Chairman of the
Management Board of the Company has previously referred to this, in his letter
of 10th of September 2012 to the Minister of Economy and Communications. 


         Mariliis Mia Topp
         Head of Communications
         AS Tallinna Vesi
         [email protected]
         Tel: (372)62 62 275