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International Internet Magazine. Baltic States news & analytics Friday, 29.03.2024, 01:11

Estonia: OEG sells Hilton hotel building to East Capital for EUR 48 mln

BC, Tallinn, 18.07.2016.Print version
Jessy Investments B.V., a company of the listed Estonian gaming operator Olympic Entertainment Group (OEG), entered into an agreement to sell to East Capital group company ECB3 Tallinn OU its 100 % holding in its Estonian subsidiary Kesklinna Hotelli OU that owns the hotel and entertainment complex in which the Hilton Tallinn Park hotel and OEG's flagship Olympic Park Casino are located, writes LETA.

The aim of the transaction is to release capital that has been invested in real estate and focus on the core business of the group - operating casinos and entertainment complexes, OEG told the stock exchange. The price of the transaction is 48 mln euros.

 

The hotel and casino operations that are in the building are not part of the transaction and will continue to be owned by OEG group. The nominal share capital of Kesklinna Hotelli OU is 2,520 euros; the acquisition price of the holding for OEG group was 77,949 euros. The 25 mln euro bank loan taken by Kesklinna Hotelli OU will also be returned during the transaction.

 

After completing the transaction, the non-current assets of OEG group will decrease by approximately 30 mln euros and liabilities will decrease by 25 mln euros. The profit from the sale, taking into account transaction-related costs, is approximately 17 mln euros. Completing the transaction is subject to fulfilling customary conditions, including obtaining approval from Estonian Competition Authority, after which payment for the holding will take place.

 

OEG group companies Olympic Casino Eesti AS and OU Fortuna Travel have long-term lease agreements with Kesklinna Hotelli OU, whereby Olympic Casino Eesti AS and OU Fortuna Travel lease the building from Kesklinna Hotelli OU for operating respectively a casino and a hotel, and make monthly lease payments.

 

"For us, this years-long development project now received a worthy close," CEO of Olympic Entertainment Group Madis Jaager said and added that owning real estate has never been an aim in itself for the group. "Olympic is after all first and foremost a tourism and entertainment enterprise, and this transaction will help us even better focus on developing our core business."

 

The complex is without doubt of great significance for the entire regional property market and a perfect addition to East Capital Real Estate's outstanding investment portfolio, CEO Madis Raidma said.






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