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Arco Vara IPO was 2,1 times over-subscribed


Announcement,15.06.07
Arco Vara AS

The initial public offering of Arco Vara AS shares closed yesterday with the aggregate demand exceeding the basic number of shares offered 2,1 times. The price of the offer was set at EUR 2,43 (EEK 38) per share.

The base of the offering was 32.9 million shares, of which 27.5 million are new shares to be issued by the company. Additionally, the offer included an over-allocation option and a fixed number of shares were offered as part of the management incentive program. In total, the investors subscribed to 69 235 119 shares, which is approximately 2.1 times more than the basic offer size.

As a result, Arco Vara gains EUR 66.79 million (EEK 1.045 billion) to finance new projects.

Mr Viljar Arakas, CEO of Arco Vara, said the company is entirely pleased with the offering results and with the entire process.

“Over these past weeks I have heard and read hundreds of opinions and statements about Arco Vara both in Estonia and all around the world. There’s been discussion about the timing of the IPO, but the quality of Arco Vara as a company has been out of the question. I wish to thank our employees who constitute the success story that Arco Vara is and our new investors who have had faith in this team,” said Mr Arakas.

Head of corporate finance of the global coordinator of the offering, SEB Enskilda, Mr Henrik Igasta said that markets are full of real-estate offerings of Eastern Europe. “The fact that the management of Arco Vara successfully distinguished itself from the crowd is an achievement in the current climate, an achievement not to go unnoticed also on its home turf, since we saw a clear division of optimists and pessimists. Therefore the result clearly exceeds our expectations,” said Mr Igasta. “This is the third largest IPO in Estonia in ten years, after Eesti Telekom and Tallink Grupp, and it should be noted that the offering was conducted in a much more challenging environment.”

37 296 752 shares (approximately 93.6%) were allocated to institutional investors in Estonia and globally and to company employees outside Estonia and Latvia. 69 institutions from 15 countries participated in the international offering.

1 034 248 shares (approximately 2.6%) were allocated to retail investors through the public offering in Estonia and Latvia. 1 834 retail investors participated in the public offering. Of the latter, 148 601 shares were allocated to Arco Vara employees and management. 1 519 000 shares (approximately 3,8%) were sold within the management incentive program.

Each retail subscriber will receive up to 750 shares, meaning that subscriptions between 1 and 750 shares were accepted in full. Investors subscribing more than 750 shares were allocated 750 shares.

The average subscription of retail investors (except employees and management) was for 1094 shares.

The total shares allocated through the international and public offering were geographically distributed as follows: United States of America 31%, United Kingdom 26%, rest of Europe 19%, Scandinavia 13% and Baltic States 13%.

After the offering the equity of the company is EUR 60 897 671 (EEK 952 841 500). Shares offered constitute approximately 41,82% of company shares, on the condition that the global coordinator of the offering SEB Enskilda realizes in full the option to buy additionally 5,4 million shares for over-allocation from the majority owners of Arco Vara, OÜ Toletum controlled by Mr Arti Arakas and Mr Richard Tomingas and OÜ HM Investeeringud owned by Mr Hillar-Peeter Luitsalu. In the event, former shareholders will altogether control 58,18 percent of votes at the shareholders general meeting.

Shares allocated will be credited to the securities’ accounts of the investors presumably around June 20th, trading with the shares on the Tallinn Stock Exchange will commence presumably on June 21st.

Arco Vara was established in 1992 in Estonia and within 15 years has grown to become the leading real-estate company in the Baltic States, covering brokering, development and construction. The company has offices in 25 cities in Estonia, Latvia, Lithuania, Ukraine, Bulgaria and Romania. At the conclusion of the first quarter the group and its joint ventures employed a total of 546 people. The audited consolidated revenues for 2006 totaled EUR 31m, with the net profit at EUR 13.9m.

Further information:
Heigo Metsoja
Arco Vara AS investor relations’ manager
This email address is being protected from spambots. You need JavaScript enabled to view it.
tel: +372 6144 654