D. Carnegie & Co presents further information on the acquisition of HBS II’s property portfolio

D. Carnegie & Co AB (publ) (”D. Carnegie & Co” or the “Company”) has, as
previously announced on 2 June 2014 entered into an agreement with the owners of
Hyresbostäder i Sverige II AB (“HBS II”), to merge their respective property
portfolios. D. Carnegie & Co will, after completion of the transaction, hold a
residential property portfolio corresponding to approximately SEK 9,500 million
and approximately 12,000 residential apartments, in and around Stockholm and the
Mälardalen area. Ahead of the extraordinary general meetings of the Company and
in HBS II in connection with the transaction, further information on the terms
of the transaction is today being announced.
Closing

On 2 June 2014 the Company convened an extraordinary general meeting to be held
on 2 July 2014. Provided that the general meeting resolves in accordance with
the Board’s proposal to amend the Articles of Association and to authorise the
Board to issue shares and convertible bonds, as well as all other closing
conditions having been met, closing is expected to take place on 4 July 2014.

Payment

The preliminary purchase price is based on a negotiated property value of HBS
II’s property portfolio of SEK 6.558 million adjusted for estimated liabilities
and other assets in HBS II on 30 June 2014, and amounts to approximately SEK
3.790 million. Of the preliminary purchase price, around SEK 1.248 million will
be paid in the form of 26 million newly issued B-shares in D. Carnegie & Co at a
preliminary subscription price of SEK 48 per B-share. Further, the Company will
issue three convertible loans, each of SEK 340 million, of totally SEK 1.020
million. The loan principals expire on 30 June 2016, 2018 and 2019,
respectively, and carries an annual interest of 5 percent. Convertible bond
holders have the right to demand early repayment of up to a third of the
principal amounts. Another SEK 200 million will be paid in the form of a vendor
note issued by D. Carnegie & Co to HBS II. The vendor note carries an annual
interest of 3 percent and matures by a third annually. Finally the Company will
pay SEK 1,321,898 in cash. See below a summary of the settlement expected to
occur at closing.

+-------------------+-------------+-------+
|Payment            |Amount (MSEK)|Percent|
+-------------------+-------------+-------+
|Cash               |       1 322 |     35|
+-------------------+-------------+-------+
|26 million B-shares|       1 248 |     33|
+-------------------+-------------+-------+
|Convertibles       |        1 020|     27|
+-------------------+-------------+-------+
|Vendor note        |          200|      5|
+-------------------+-------------+-------+
|Total              |        3 790|    100|
+-------------------+-------------+-------+

A new balance will be prepared as per the closing date, with any adjustments in
relation to the estimated liabilities and other assets in HBS II, after which
the preliminary purchase price may be adjusted.

Call Option

HBS II has also entered into an agreement with the Company’s principal
shareholder Kvalitena AB (publ) (“Kvalitena”) under which Kvalitena has
committed to acquire shares in the Company at a value of SEK 100 million per
quarter until 31 December 2016, starting the first quarter of 2015. The
commitment is limited to a total maximum of SEK 600 million during the period.

Transfer restrictions

HBS II has also committed not to, for a period of six months after closing, sell
shares in D. Carnegie & Co over NASDAQ OMX First North.

Ulf Nilsson, CEO, comments:

“We have found a good structure for both parties to complete this exciting
transaction, which allows D. Carnegie & Co to become Sweden’s largest listed
property company focused on residential properties. Together, we will have a
management structure that can create substantial value for our shareholders in
the future and we have the financial capacity to continue our growth.”

For further information, please contact:

Ulf Nilsson, CEO, D. Carnegie & Co

+46 (0)8 121 317 00

Knut Pousette, Chairman of the Board of Directors, D. Carnegie & Co

+46 (0)8 121 317 00

Further information is available on www.dcarnegie.se

About D. Carnegie & Co

D. Carnegie & Co is a real estate company focusing on residential properties
within the Stockholm region and other growth areas. The Company’s business
concept is to own and manage its real estate portfolio and to gradually
refurbish apartments in connection with the natural turnover of tenants. This
can take place quickly and cost-efficiently due to the Company’s established
refurbishment method, BosystemTM. The refurbishment model is popular with both
tenants and the Swedish Union of Tenants (Sw. Hyresgästsföreningen) as the
apartments are attractively refurbished without any tenants being forced to
vacate the premises against their will. The Companys Certified Adviser is G&W
Fondkommission.

At the beginning of 2014, Stendörren transferred its residential properties to
D. Carnegie & Co and thereby became the owner of a real estate portfolio
consisting of residential properties in Stockholm’s growth areas. As of 31
December 2013, the market value amounted to SEK 2,929 million and the total
rental value was estimated to amount to SEK 287 million per year. The financial
leasing rate is high and none of the properties are vacant. D. Carnegie & Co’s
real estate portfolio is situated in the Stockholm region. D. Carnegie & Co is
listed on NASDAQ OMX Firth North since 9 April 2014.

About Hyresbostäder i Sverige II AB
HBS II has since 2004 been a sizeable participant in the Swedish residential
property market with a portfolio of over 700,000 sqm of residential area. The
properties are located in Eskilstuna, Strängnäs, Södertälje, Huddinge, Haninge,
Bro, Märsta, Uppsala och Göteborg. HBS II has an own property management
organisation, Graflunds AB, which manages all HBS II’s properties and also
external properties.  HBS II is owned by Norwegian and Swedish investors through
Boligutleie Holding II AB and Hyresfastigheter Holding II Blå AB. According to
the investment mandate, the property portfolio will be disposed of between 2013
and 2016, depending on most optimal market conditions.