On 11 April 2013, Kylemore International Invest Corp, a creditor of Tivoli Arendus OÜ (Tivoli Arendus), presented a claim for payment and initiated execution proceedings for satisfying its claim through sale of the properties belonging to Tivoli Arendus. Arco Vara group will join the execution proceedings, claiming recovery of a loan of approx. 2.9 million euros. The creditors have reached a mutual compromise.
Because of the lengthy and legally complicated history of the Tivoli project, the properties will be sold at a public auction conducted by a bailiff. This will ensure maximum legal certainty to potential buyers as well as Tivoli Arendus and its owners and creditors.
Further information on the sale of the Tivoli properties can be found at: www.arcovara.ee/tivoli
Tivoli Arendus is a project company established for developing a plot of 48,588 square metres in the centre of Tallinn (former address: Narva mnt 67). The company’s only significant assets are the properties located on the above plot. The shareholders of Tivoli Arendus are, in equal proportions, Arco Investeeringute AS and International Invest Project OÜ.
Commentary of Tarmo Sild, the CEO of Arco Vara AS:
“At a webinar held on 31 January 2013, we informed the public that the group has three major problems that need to be resolved. I am pleased to report that to date we have stabilised the situation in Bulgaria (see also the stock exchange announcement at http://bit.ly/14hwr1M) and the situation at Tivoli Arendus is stabilising. However, we continue active efforts to find a solution for the third problem – the property at Ahtri 3.
The partners of the Tivoli project have reached consensus in that they cannot carry out the project together and that the property should be realised in a manner that is beneficial for both parties, taking advantage of investors’ increasing interest in development properties that have an effective detailed design plan, a building permit and the best possible location.
A successful sale would also improve the group’s financial position. Because of the weak position of the collateral of the loan provided by Arco Vara - the mortgage created for the benefit of the partner has a priority ranking, the loan to Tivoli Arendus (nominal amount 2.9 million euros) had to be written down in full. In addition, we had to recognise a provision of 1 million euros for covering the surety guarantee Arco Vara had provided to the partner.
The sale would be a step in the direction that we could release the provision in the near term and, depending on the outcome of the auction, could also satisfy part of our claim.”
Egert Paulberg
Financial Controller
Arco Vara AS
Tel: +372 614 4503
egert.paulberg@arcovara.ee