OEG sold a subsidiary that owns the Hilton hotel complex building in Estonia
The aim of the sales transaction is to release capital that has been invested into real estate and to focus on the core business of the group – operating casino and entertainment complexes. The hotel and casino operations that are in the building are not part of the sales transaction and will continue to be owned by OEG group. The nominal share capital of Kesklinna Hotelli Oy is 2,520 euros; the acquisition price of the holding for OEG group was 77,949 euros. The bank loan in amount of 25 million euros taken by Kesklinna Hotelli Oy will also be returned during the transaction. After completing the transaction, the non-current assets of OEG group will decrease by approximately 30 million euros and liabilities will decrease by 25 million euros. The profit from the sales transaction, taking into account transaction-related costs, is approximately 17 million 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 Oy Fortuna Travel have entered into long-term lease agreements with Kesklinna Hotelli Oy, whereby Olympic Casino Eesti AS and Oy Fortuna Travel lease the building from Kesklinna Hotelli O? for operating respectively a casino and a hotel, and make monthly lease payments. Kesklinna Hotelli Oy is not involved in any court or arbitration proceedings which could have a significant effect on the business activity of the company. The management board member of Kesklinna Hotelli O? is Meelis Pielberg (also a management board member of Olympic Entertainment Group AS), who will be replaced with person(s) appointed by the buyer after completing the transaction. The transaction is not considered to be a transaction with related parties (in the meaning of the rules and regulations of NASDAQ Tallinn stock exchange). The management board and the supervisory board members of OEG are not personally interested in this transaction in any other way.
The financial results and information of the subsidiary being sold
Kesklinna Hotelli Oy financial results
(EUR thousands) | 2015 | 2014 | 2013 |
Revenue | 1 | 0 | 292 |
Net loss | -458 | -409 | -109 |
Dividend per share | 0 | 0 | 0 |
Basic and diluted earnings per share | -458 | -409 | -109 |
Statement of financial position
(EUR thousands) | 31.12.2015 | 31.12.2014 |
ASSETS | ||
Current assets | ||
Cash and cash equivalents | 1,222 | 22 |
Receivables and prepayments | 564 | 266 |
Inventories | 2 | 1 |
Total current assets | 1,788 | 289 |
Non-current assets | ||
Investment property | 21,080 | 6,363 |
Property, plant and equipment | 1 | 1 |
Total non-current assets | 21,081 | 6,364 |
TOTAL ASSETS | 22,869 | 6,653 |
LIABILITIES AND EQUITY | ||
Current liabilities | ||
Borrowings | 223 | 0 |
Trade payables and prepayments | 1,621 | 85 |
Total current liabilities | 1,844 | 85 |
Non-current liabilities | ||
Long-term borrowings | 21,998 | 7,084 |
Total non-current borrowings | 21,998 | 7,084 |
TOTAL LIABILITIES | 23,842 | 7,169 |
EQUITY | ||
Nominal share capital | 3 | 3 |
Other reserves | 5 | 5 |
Retained earnings | -981 | -524 |
TOTAL EQUITY | -973 | -516 |
TOTAL LIABILITIES AND EQUITY | 22,869 | 6,653 |
Statement of comprehensive income
(EUR thousands) | 2015 | 2014 |
Revenue | 1 | 0 |
Total revenue and income | 1 | 0 |
Miscellaneous operating expenses | -454 | -409 |
Other expenses | -5 | 0 |
Total operating expenses | -459 | -409 |
Operating loss | -458 | -409 |
Loss before income tax | -458 | -409 |
Net loss for the period | -458 | -409 |
Total comprehensive loss for the period | -458 | -409 |
In 2016 Kesklinna Hotelli Oy completed the construction of the hotel complex and leased out the building on a long-term basis to Olympic Casino Eesti AS and O? Fortuna Travel that operate a casino and a hotel in the building.
Overview of loans taken by Kesklinna Hotelli Oy as at 11.07.2016
(EUR thousands)
Lender | Maturity | Amount (principal) |
Swedbank AS | 31.08.2018 | 25,000 |
Olympic Entertainment Group AS | 15.07.2017 | 5,600 |
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