Börsiteade

Pealkiri

01.09.2014: RESULTS OF SUBSCRIPTION FOR ARCO VARA AS NEW SHARES

Teade

From 8 August, 2014 until 29 August, 2014 took place the offering of new shares
of Arco Vara AS. In total 1 375 305 shares were subscribed for. Arco Vara AS
has made a decision regarding the allocation of subscribed shares to the
investors. All investors will receive the full amount of shares they subscribed
for. The Management Board of Arco Vara AS will adopt a decision regarding the
shares which were not subscribed for, i.e. 2 124 695 shares, after the
settlement. 

As a result of the subscription of new shares the share capital of Arco Vara AS
will be increased by 962 713.5 EUR, i.e. the new share capital will be 4 281
908.4 EUR. 

CEO’s comment about the subscription results: “The Company set out to raise up
to 3.5 million EUR. Subscriptions equalled 39% of this total and the company
attracted 1.375 million EUR. Investors may therefore ask, whether the
subscription was a success or a failure? 

This implies that Arco Vara’s shares on issue will be increased by 29%, from
4.7 million to 6.1 million. A mixture of retail and institutional investors
participated, including those who were not previously shareholders of Arco
Vara. 

From the viewpoint of management the capitalization of the group has improved
and for the first time since 2012 the group has free cash which can be invested
into new projects. One may also say that it is the first time since the IPO
investors dared to place their money into Arco Vara again. Key employees of
Arco Vara’s Bulgarian and Estonian units participated in the share issue,
contributing more than 20,000 EUR. The company thanks everyone for their trust
and admits that more work is necessary to regain full investor confidence in
the coming years. 

The share capital increase objectives that we set in the spring were to (i)
implement the Paldiski road 70C development project in Tallinn and (ii)
continue earning stable rent revenues in Sofia, Madrid Blvd building by
extending the existing loan agreement until December 2017 and by reducing the
outstanding loan on the building by 1.2 million EUR. 

Management deems the realization of these objectives as very likely. As a
condition precedent, we must continuously succeed in selling the apartments in
Manastirski Stage II and undertake very dynamic management of cashflows.
Construction works of Manastirski Stage II must be completed within 60 days at
the latest and the sale of the apartments commences in Q4. The extension of the
loan agreement with Piraeus bank in the Madrid Blvd project has already been
signed, and the 1.2 million EUR must be paid by the end of November 2014.
During the capital raising process management also received confirmation that
there is interest from potential investors to participate in the Paldiski road
70C project even if Arco Vara itself would not be able to inject additional
equity into the project (in addition to the existing landplot and construction
rights) - whereas it should be immediately added that depending on the success
of the Manastirski project the group will have sufficient capacity to inject
equity into its new projects. 

As a main obstacle to engage new investors into the group, we should point out
their current fears towards general uncertainties resulting from the escalating
Russia-Ukraine conflict. Evidently the group can help to overcome these
concerns by demonstrating within the next one to two years its capability to
make money with development activities in its markets, and distribute money
between the broadened shareholder base consisting of 6.1 million shares.” 

On 26 August, 2014, the Management Board of NASDAQ OMX Tallinn stock exchange
decided to approve the application of Arco Vara AS and to list up to 3 500 000
additional shares in the Baltic Primary List under the following conditions: 

·         the offering Arco Vara AS shares has been completed, the offering has
been conducted according to the conditions described in the Issuer’s prospectus
and the offering results are disclosed; 

·         the offered shares have been transferred to the securities accounts
of new investors in Estonian CSD; 

·         the issued shares have been converted into main shares (ISIN:
EE3100034653) in Estonian CSD; 

·         after meeting the aforementioned conditions, Arco Vara AS has
submitted the respective report to the Exchange. 

Trading with Arco Vara AS additional shares will start on the next trading day
after meeting the aforementioned conditions. 



IMPORTANT DATES:

  -- On or about 04.09.2014 new shares will be transferred to the investors’
     securities accounts
  -- On or about 17.09.2014 new shares will commence trading on the NASDAQ OMX
     Tallinn Stock Exchange




         Evelin Kanter
         Lawyer
         Arco Vara AS
         Tel: +372 614 4594
         [email protected]
         http://www.arcorealestate.com