For the purpose of arranging financing of a privatisation procedure, Arco Investeeringute AS (a 100% subsidiary of Arco Vara AS) temporarily transferred its holding in Prime Capital SIA to a related party - Dreiliņi-Ulbroka-1 SIA related with Mr. Viktors Savins.
In August, Prime Capital SIA, a Latvian company where Arco Investeeringute AS has a majority holding won a land privatization auction in the Baltezers elite residential area, Garkalne region near Riga. As a result, the company obtained the right to privatize 86.19 ha residential land. The plot was previously leased on a long-term basis to Arco Development SIA, a subsidiary of Arco Investeeringute AS.
At the auction, the plots were sold at a price of 1.625 million euros. The purchase price has to be paid in two parts: 70% within a month after the conclusion of an agreement (the auction fee of 70,000 euros is considered as part of the first payment), the remaining 30% are paid on 31.12.2011 at the latest.
Due to lack of available resources, the holding of Arco Investeeringute AS in Prime Capital SIA was transferred to Dreiliņi-Ulbroka-1 SIA, a company related with Mr. Viktors Savins, at a nominal price of 1,400 LVL. The transferee is obliged to resell the holding of Arco Investeeringute AS on demand with a price of 500,000 euros, which is the expected self-financing rate for Arco Investeeringute AS in final financing of the total transaction.
The sales transaction will not have any essential economic influence as the holding was sold at nominal value, i.e. acquisition cost.
Arco Vara is a leading property development company in the Baltic areas, established in 1992. Main activity of the company is real estate development, supported by brokerage, valuation, construction and facility management.
Company is represented in 17 cities in Estonia, Latvia, Ukraine and Bulgaria.
Lembit Tampere
CEO
Arco Vara AS
phone: +372 614 4630
lembit.tampere@arcovara.ee
http://www.arcorealestate.com