Pro Kapital Grupp : Acquisition of shareholding in AS Tallinna Moekombinaat

Pro Kapital Grupp
Company Announcement

Acquisition of shareholding in AS Tallinna Moekombinaat

AS Pro Kapital Eesti, company belonging to group of companies of AS Pro Kapital Grupp, has on 24.01.2017 concluded the contract for purchase of minority shareholding of its subsidiary AS Tallinna Moekombinaat.

Based on the purchase contract AS Pro Kapital Eesti bought 300 000 of the A-shares of AS Tallinna Moekombinaat for 480 000 EUR, which represents 1,4% of all AS Tallinna Moekombinaat shares. The shares were paid for on 24.01.2017. After the acquisition AS Pro Kapital Eesti holds 93,3% of AS Tallinna Moekombinaat shares.

The transaction has no significant effect on profit, assets and liabilities of the Issuer.

The seller of the shares was Katmandu Stiftung, Liechtenstein company controlled by Mr Ernesto Preatoni. Mr. Ernesto Preatoni and his affiliates are the largest shareholders of AS Pro Kapital Grupp. The transaction is a related party transaction, members of the Issuer's supervisory board and management board are not personally interested in the transaction.

AS Tallinna Moekombinaat field of activity is real estate development and its business activity is the development of T1 shopping and entertainment center located in Tallinn.

The goal of purchase of the participation was to increase Pro Kapital's shareholding in the company developing T1 shopping and entertainment center.

AS Tallinna Moekombinaat financial results for previous 3 years:

(in euros)	2015	2014	2013
Revenue	0	0	0
Profit (loss) for the financial year	-968 291	145 790	-188 924
Profit (loss) for the financial year per share	-0,05	0,01	-0,01

AS Tallinna Moekombinaat audited financial reports for the previous 3 years:

Statement of Financial Position
(in euros)	31.12.2015	31.12.2014	31.12.2013
Assets
Current Assets
Cash and bank balances	18 801	42 193	2
Current receivables and prepayments	210 908	46 958	11 817
Total Current Assets	229 709	89 151	11 819
Non-Current Assets
Investment property	26 300 000	25 700 000	24 300 000
Total Non-Current Assets	26 300 000	25 700 000	24 300 000
Total Assets	26 529 709	25 789 151	24 311 819
Liabilities and Equity
Liabilities
Current Liabilities
Current debt	30 000	0	0
Current payables and advances	908 857	183 288	370 668
Short-term provisions	0	0	26 299
Total Current Liabilities	938 857	183 288	396 967
Non-Current Liabilities
Non-current debt	2 826 595	2 814 595	2 277 120
Non-current payables	777 862	39 615	24 401
Long-term provisions	84 467	34 183	0
Total Non-Current Liabilities	3 688 924	2 888 393	2 301 521
Total Liabilities	4 627 781	3 071 681	2 698 488
Equity
Share capital in nominal value	12 491 259	12 312 000	12 072 000
Unregistered share capital	0	135 823	0
Share premium	691 839	582 526	0
Statutory reserve	7 290	0	0
Retained earnings	9 679 831	9 541 331	9 730 255
Profit (loss) for the financial year	-968 291	145 790	-188 924
Total equity	21 901 928	22 717 470	21 613 331
Total liabilities and equity	26 529 709	25 789 151	24 311 819
Income Statement
(in euros)	2015	2014	2013
Marketing expenses	-37 870	-47 305	-3 336
Administration expenses	-380 371	-303 571	-94 352
Other operating income	0	640 318	0
Other operating expenses	-383 048	-348	0
Gross profit (loss)	-801 289	289 094	-97 688
Interest expenses	-167 006	-143 331	-91 236
Other financial income	4	27	0
Profit (loss) before tax	-968 291	145 790	-188 924
Profit (loss) for the year	-968 291	145 790	-188 924
Statement of cash flows
(in euros)	2015	2014	2013
Cash flows from operating activities
Gross profit (loss)	-801 289	289 094	-97 688
Adjustments
Other adjustments	382 645	-636 820	0
Total adjustments	382 645	-636 820	0
Changes in trade receivables and prepayments	-163 950	116 859	5 739
Changes in liabilities and prepayments	1 348 201	9 847	-446 014
Interests received from operating activities	4	27	0
Total cash flows from operating activities	765 611	-220 993	-537 963
Cash flows from investing activities
Payments for investment property	-982 645	-1 015 494	-302 264
Total cash flows from investing activities	-982 645	-1 015 494	-302 264
Cash flows from financing activities
Proceeds from borrowings	112 000	637 475	839 050
Repayments of borrowings	-70 000	-100 000	0
Interests paid	-1 107	-217 146	0
Proceeds from increase of share capital	152 749	958 349	0
Total cash flows from financing activities	193 642	1 278 678	839 050
Total cash flows	-23 392	42 191	-1 177
Cash and cash equivalents at the beginning of the year	42 193	2	1 179
Change in cash and cash equivalents	-23 392	42 191	-1 177
Cash and cash equivalents at the end of the year	18 801	42 193	2

Statement of Changes in Equity
(in euros)	Issued capital	Unregistered share capital	Share premium	Statutory reserve	Retained earnings (loss)	Total
31.12.2012	12 072 000	0	0	0	-2 940 028	9 131 972
Profit (loss) for the financial year	0	0	0	0	-188 924	-188 924
Other changes in equity	0	0	0	0	12 670 283	12 670 283
31.12.2013	12 072 000	0	0	0	9 541 331	21 613 331
Profit (loss) for the financial year	0	0	0	0	145 790	145 790
Increase of share capital	240 000	135 823	582 526	0	0	958 349
31.12.2014	12 312 000	135 823	582 526	0	9 687 121	22 717 470
Profit (loss) for the financial year	0	0	0	0	-968 291	-968 291
Increase of share capital	179 259	-135 823	109 313	0	0	152 749
Changes in reserves	0	0	0	7 290	-7 290	0
31.12.2015	12 491 259	0	691 839	7 290	8 711 540	21 901 928

Since the end of the previous financial year no significant changes have occurred to the business of AS Tallinna Moekombinaat. On 18.11.2016 AS Tallinna Moekombinaat signed a contract for financing the design and construction works of the T1 shopping and entertainment center, located at Peterburi mnt. 2, Tallinn. The total volume of the financing agreement is 65 million EUR. The signed financing agreement and the funds at the disposal of Pro Kapital make the T1 shopping and entertainment center project fully funded and on track to open in autumn 2018.

Overview of the loans taken by AS Tallinna Moekombinaat as of 31.12.2016:

• AS Pro Kapital Eesti loan balance is of 10 264 220 euros;
• Minor shareholder's Fiducuiaria Emiliana S.R.L. loan balance is 196 800 euros;
• Minor shareholder's A.F.I. American Financial Investments Ltd. loan balance is 111 375 euros;
• Lintgen Adjacent Investments S.à r.l. loan balance is 885 500 euros.

AS Tallinna Moekombinaat shareholders structure (post transaction):

Shareholder	Number of shares	Shareholding %
AS Pro Kapital Eesti	19 659 153	93,3
Minority shareholders*	1 722 135	6,7
Total	21 381 288
* none of the minority shareholders holds more than 5% of the shares

AS Tallinna Moekombinaat is not involved in any court or arbitration proceedings which may have a significant effect on the business activity of the company (there are no court or arbitration proceedings).

AS Tallinna Moekombinaat and the Issuer do not have any valid agreements.

AS Tallinna Moekombinaat supervisory council members are: Ernesto Preatoni, Emanuele Bozzone, Paolo Michelozzi. AS Tallinna Moekombinaat management board members are: Allan Remmelkoor, Kristjan Kask, Ervin Nurmela.

Allan Remmelkoor
Member of the Management Board
Tel.: [phone]
Email: [e-mail]