Es­to­nia: Hans Luik to buy Pro Kap­i­tal's ho­tels in Tallinn, Riga

The Baltic Times - - BALTIC NEWS - BNS/TBT Staff

The listed Es­to­nian real es­tate de­vel­oper Pro Kap­i­tal Grupp AS has con­cluded the con­tract for the sale of the group's ho­tel PK Il­ma­rine in Tallinn and PK Riga in Riga to Hans Luik's com­pany Sisne In­vest and the op­er­a­tor ac­tiv­ity to BBH Ho­tel Group OU, while the to­tal cost of the trans­ac­tion is 13 mil­lion eu­ros.

"The goal of the trans­ac­tion, in­clud­ing the dis­posal of the shares, is to exit the Tallinn and Riga ho­tel mar­ket which has not been a core busi­ness for the group. The Tallinn and Riga ho­tel mar­kets are in a pos­i­tive state, so for us it is the right mo­ment for the exit. Our goal is to con­cen­trate on the de­vel­op­ment of res­i­den­tial and com­mer­cial real es­tate and to use the mon­e­tary re­sources re­ceived from the trans­ac­tion to speed up the de­vel­op­ment of our core busi­ness in the mar­kets, which have pos­i­tive trends," Paolo Mich­e­lozzi, CEO of Pro Kap­i­tal Grupp, said in a state­ment made to the stock ex­change.

Buy­ers of the real es­tate re­lated as­sets are Sisne In­vest OU in Es­to­nia and SIA Sisne In­vest Riga in Latvia, Pro Kap­i­tal told the stock ex­change. The trans­ac­tion is de­pen­dent on the con­di­tions to be ful­filled by the buyer and they have un­til Septem­ber 30, 2017, to ful­fill the con­di­tions.

The es­ti­mated amount of the trans­ac­tion is 13 mil­lion eu­ros, of which 6.9 mil­lion eu­ros is the amount al­lo­cated to PK Il­ma­rine, which has been paid dur­ing the ful­fil­ment of the trans­ac­tion and the base price of PK Riga is 6.1 mil­lion eu­ros. The ex­act price of the Lat­vian trans­ac­tion will be de­ter­mined upon the clos­ing of the trans­ac­tion, as the price is de­pen­dent on the re­sult of eco­nomic ac­tiv­ity of the ho­tel as of the clos­ing. Al­to­gether 630,000 eu­ros has been paid upon sign­ing and the rest will be paid upon the clos­ing of the Lat­vian trans­ac­tion.

As a re­sult of the trans­ac­tion, the rev­enue of Pro Kap­i­tal Group will de­crease by 3.1 mil­lion eu­ros, while net profit will fall 900,000 eu­ros, at the same time, based on the 2016 fi­nan­cial re­sults the fi­nan­cial li­a­bil­i­ties of the group will de­crease by 6.1 mil­lion eu­ros and cash as­sets will in­crease by 6.9 mil­lion eu­ros.

As of clos­ing the trans­ac­tions, all con­tracts be­tween is­suer and dis­posed com­pa­nies are ter­mi­nated. The is­suer shall con­clude the fix term li­cense agree­ment for the use of PK Ho­tels, PK Il­ma­rine ho­tel and PK Riga ho­tel trade­marks with the buy­ers.

Due to the sale of PK Il­ma­rine ho­tel op­er­a­tor, head of the le­gal depart­ment of Pro Kap­i­tal Ervin Nurmela re­signed from the man­age­ment board of OU Ho­tel Man­age­ment Ser­vices and per­sons re­lated to the buyer were elected as new board mem­bers. Boards of com­pa­nies re­lated to the Lat­vian trans­ac­tion will con­tinue to serve as board mem­bers un­til the clos­ing of the Lat­vian trans­ac­tion.

As a re­sult of the trans­ac­tion, Pro Kap­i­tal will exit the Tallinn ho­tel mar­ket and af­ter the clos­ing of the Riga ho­tel trans­ac­tion will exit also from the Riga ho­tel mar­ket.

Founded in 2014, BBH Ho­tel Group is the group's par­ent com­pany, which op­er­ates the Laulas­maa Spa and Con­fer­ence Ho­tel and Hotell Euroopa and Tallinn Sea­port Ho­tel lo­cated in the Tallinn city cen­ter. Ac­cord­ing to the sea­son, the group em­ploys ap­prox­i­mately 300 peo­ple.

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