Elite residential area established in Tallinn

The Baltic Times, TALLINN
Sep 28, 2000
By Kairi Kurm

 Not all the good properties in Tallinn have been sold. Real estate developer Hestlinger is planning to establish a new dwelling zone called Merirahu at a favorable place near the sea between the Kakumae harbor and the Rocca-al- Mare Estonian Open Air Museum.

The sale of the elite residential area will start next June. The 16.1-hectare area will be cut into 87 plots, each of about 1300 to 1700 square meters.

“Our aim is to create the best living area in Tallinn,” said Aivar Aigro, manager of Hestlinger. He said that people are above all looking for natural areas near the city center, sea and good neighbors when choosing their homes.

The established area lies near a new private school house, large trading center Maksimarket, a zoo, an open air museum, an amusement park and, in a year, a huge sports hall, Saku Suurhall, will be built nearby.

Aigro said that by next spring all necessary communications will be established in the Merirahu area, and it will be prepared for the construction of dwellings. He also noted that all the plots had grown trees and that the nearby coastline would be turned into a beach. Also, a yachting harbor for 30 yachts and 20 boats will be established after all the plots have been sold out.

“Unlike the rest of the seaside plots, the wind at Merirahu blows mostly from the land and thus it is not cold,” said Aigro.

Although the plots at Merirahu have a view over the sea, the view will open on the Bekkeri harbor rather than the silhouette of the center of Tallinn, which the residents of Pirita, the most popular green area in Tallinn, can enjoy.

Ain Kivisaar, an analyst from the real estate company Uus Maa, said in a market survey that Pirita is like an “Estonian Hollywood.” While the average new dwelling plots range from 300 ($17) to 430 kroons per square meter, the prices at Pirita sometimes reach 1,000 kroons, said Kivisaar.

Aigro said the final price of the Merirahu development depends on the supply of the plots and market prices, but it would definitely be one of the most expensive because of the good location and quality.

“Hestlinger declared that they are establishing the most expensive plots in Tallinn. The maximum price at present is 1000 kroons per square meter. I believe that their price should not reach that level,” said Kivisaar.

According to Uus Maa, Maarjamae and Merivalja are the most expensive plot areas in Tallinn with a price ranging from 500 to 1000 kroons per square meter. Plots at Viimsi, Rohuneeme and Mahe cost about 150 to 500 kroons per square meter, and at Nomme, Kakumae and Paaskula the prices range from 250 to 600 kroons per square meter.

At Lillekula, a green area in the center of Tallinn, prices range from 300 to 500 kroons per square meter. At Tabasalu, six kilometers out of Tallinn, the plots cost about 100 to 200 kroons per square meter, and a kilometer closer to Tallinn, at Tiskre, the prices range from 350 to 450 kroons per square meter. Tiskre is a new dwelling area along the sea with all necessary communications that is very popular among bankers and other businessmen.

Source: http://www.baltictimes.com/news/articles/2692/

Uhispank sentenced to pay 56.6 mln kroons once frozen in Russia

The Baltic Times, TALLINN
Sep 28, 2000
By Kairi Kurm

 A Tallinn municipal court made a landmark ruling Sept. 19 ordering Uhispank to pay 56.6 million kroons ($3.1 million) to A.O. Imbi for funds frozen in Russia’s Vneshekonombank ten years ago.

The bankrupt A.O. Imbi acquired the claim from Latvian company Erkers, whose assets were frozen in Russia in a correspondent account with an Estonian commercial bank that was later merged with Uhispank.

Kalev Bachmann, a lawyer who represents A. O. Imbi, said that the two companies were business partners.

“It would have been very expensive and troublesome for a Latvian company to claim money from a foreign country, so Imbi acquired this claim for a certain amount of money,” said Bachmann.

He said that it is the second time that the company has tried to get its money back.

“The lawsuit has lasted for two years. The lawyers of the bank have tried to put obstacles in the way several times,” said Bachmann.

Bachmann said that the final court ruling failed to consider the monthly interest and the dollar exchange rate that would have raised the total amount of the claim to 72 million kroons.

“The Constitution of Estonia enacts the principles of expropriations. Expropriation shall be valid if it is done according to the statutes, in cases of public interest and in exchange for equitable and appropriate compensation. The decision of Riigikogu did not set any procedures for how the expropriation should be done. Also the formation of VEB-Fund was not in the public interest nor were certificates of VEB Fund equitable and appropriate for compensation,” said Bachmann.

Uhispank promised to appeal the decision to Tallinn District Court, saying that Erkers did not have the credentials to surrender the claim to Imbi.

“Why don’t they want to pay it directly to Erkers then?” Bachmann wondered.

Erkers acquired the claim from Baltic Uhispank (Union Bank of Baltics), whose claim was originally against Pohja-Eesti Pank (North Estonian Bank), one of the banks on the basis of which Uhispank was formed.

Eero Raun, head of PR department at Eesti Uhispank, said that the money has never actually passed through the bank.

“Pohja-Eesti Pank, that merged with Eesti Uhispank, never had the pertinent claims booked on its balance sheet as these claims had been transferred into VEB Fund from the balance sheet of Pohja-Eesti Aktsiapank, the predecessor of Pohja-Eesti Pank,” said Raun.

“Whether the claims are booked on the balance sheet or not makes no difference. If all the debtors of Uhispank decide one day to transfer all the claims off their balance sheet, it does not mean that they will lose all their responsibilities,” Bachmann said.

“The Estonian Parliament had established the VEB Fund next to the central bank to collect all the frozen accounts. Uhispank is not the legal person to ask money from,” said Raun.

Bachmann said Parliament did not have any right to transfer claims to the VEB Fund in 1993.

He also said that during its seven years of existence, VEB Fund has never tried to get the money back from Russia.

Eesti Uhispank is of the opinion that the freezing of assets disputed in this case was a political decision by Russia in order to exercise pressure on Estonia and consequently the whole issue should be settled by both states.

“It is a dispute between the two countries, Estonia and Russia. A private company cannot do anything about it as long as a decision has not been made between the two countries,” said Raun.

According to BNS, from 1991 till 1992 VEB Fund froze a total of $67 million belonging to Estonian clients. The Estonian government, the Bank of Estonia and the Baltic Uhispank have the biggest claims on VEB Fund.

Bachmann suspects that Uhispank has had access to the money in the correspondent bank all the time. “The amount of the so-called frozen money has decreased by today,” said Bachmann.

“Pohja-Eesti Aktsiapank was a state bank. For a client it was purely a relationship between the bank and the client. It is not the client’s decision, whether the bank keeps its money in New York or Moscow,” said Bachmann.

Bachmann said that Russia froze the accounts of the correspondent bank and the clients and did not have any claims against the Russian banks. He said that Uhispank was wrong if it thought that it did not have the obligation to pay out the clients’ money.

Uhispank is planning to file an appeal with Tallinn District Court. “The next level depends on many parties,” said Raun. “It would be nice if the process would move further.”

In the first half of 2000 Eesti Uhispank earned 45.5 million kroons consolidated profit. By June 30, the group’s assets had reached 15.3 billion kroons.

Source: http://www.baltictimes.com/news/articles/2684/

Kristiine Center plans to get listed

The Baltic Times, TALLINN
Sep 14, 2000
By Kairi Kurm

The management board of a real estate developer Pro Kapital Eesti, the sole owner of the shopping center Kristiine Kaubanduskeskus, on Aug. 28 announced its decision to list the complex on the Tallinn Stock Exchange Secondary List.

According to Andrus Laurits, CEO of Pro Kapital Eesti, the aim of listing the subsidiary’s shares is to turn them to liquid stock exchange traded securities, and raise additional capital to carry out the plans for expansion.

The core business of the company is renting out and administrating retail space in the Kristiine Kaubanduskeskus shopping mall, situated near the center of Tallinn.

It is also one of the largest shopping centers in the Baltic countries with a gross leasable area of 17,500 square meters, which will be expanded by 7,146 square meters by the end of August 2001.

About 60 percent of the new area will be rented out to a multiplex movie theater, which will be operated by Baltic Development Group. The rest will be rented out to additional trading partners and a bowling center.

About 30 percent of the 165 million kroon ($9.2 million) investment in the new expansion project will be covered by the company’s own equities, the rest will be financed with a bank loan.

Through a public issue of two million new ordinary shares valued at 10 kroons each, Pro Kapital Eesti is planning to increase the volume of Kristiine Kaubanduskeskus’ share capital to 200 million kroons.

In addition to the new float, Pro Kapital is planning to dispose of 7.8 million existing shares.

After the public issue and public offering of shares, Pro Kapital’s share in Kristiine Kaubanduskeskus will decrease from 100 percent to 51 percent.

Eva Palu, investor relation’s manager at the Tallinn Stock Exchange, said that Pro Kapital has not turned in an official application for the listing of Kristiine shares, but in general the exchange welcomes new shares on the stock exchange. Laurits said that the company was working on the conditions to be accepted in the list and the unofficial talks with the stock exchange had already started.

According to some specialists, nine to 11 companies listed on the Tallinn Stock Exchange might delist their shares in the near future due to a strategic investment in the company.

Toomas Reisenbuk, from the research department of Trigon Capital, said that Kristiine Kaubandus- keskus is too small to get the attention of big foreign investors and funds, but it is a good alternative for investors who are interested in real estate investments.

“The company will definitely receive some interest on the market. The success of their issue depends much on their transparency and the price of the offer,” said Reisenbuk.

Kristiine Kaubanduskeskus earned a 7.3 million kroons profit from a 25 million kroon turnover in the first half of this year.

“There are many companies on the stock exchange with a market capitalization of about 200 million kroons or less, so the size really does not matter. It is positive that the company is purely engaged in real estate business,” said Reisenbuk.

He said that the market capitalization of Tallinna Kaubamaja, the only retail sale-oriented company listed on the Tallinn Stock Exchange, is over 300 million kroons and the company is totally different from Kristiine Kaubanduskeskus, because it is engaged in retail sales as much as in real estate.

The subscription period for the public issue of Kristiine Kaubanduskeskus shares, which is scheduled to take place from Oct. 20 until Nov. 20, in all commercial banks in Tallinn. The initial public offering of existing shares of Kristiine Kaubanduskeskus will take place at the same time.

Source: http://www.baltictimes.com/news/articles/2549/

Two Scandinavian banks struggling for the Baltic market

The Baltic Times, TALLINN
Sep 07, 2000
By Kairi Kurm

 Uhispank, the second biggest bank in the Baltics and the third biggest company on the Tallinn Stock Exchange, came out with great news on Aug. 28, which made the stock exchange more active than usual for a couple of days.

Uhispank announced that a Swedish banking group, Skandinaviska Enskilda Banken (SEB), was interested in acquiring the remaining shares in Estonia’s Uhispank, Latvia’s Unibanka and Lithuania’s Vilniaus Bankas. SEB presently owns 50 percent of Uhispank and Unibanka and 41 percent in Vilniaus Bankas.

SEB is now ready to pay 40 percent above the last closing price for each remaining share in order to get full ownership in the three banks and create a market leader in the Baltics.

Indrek Neivelt, chairman of the board at Hansapank, said that competition in the banking market was becoming very tight after SEB’s acquisition of the three Baltic banks.

“There is a big difference in whether SEB owns 50 percent or the whole 100 percent in Uhispank. It will definitely make us work harder,” he said.

Hansapank, 55 percent of which belongs to the Swedish banking group Swedbank, is the market leader in Estonia and the Baltics at present. Neivelt said Hansapank’s market share in Estonia is 55 percent, while Uhispank controls 30 percent of the market.

Hansapank’s total share in the Baltics is 24 percent of deposits and 26 percent of loans, but the three banks within the SEB group will have a joint 28 percent market share of deposits and 35 percent of loans in the Baltic states, which puts them clearly ahead of Hansapank.

“Hansapank is growing fast both in Latvia and Lithuania, although our presence in Lithuania is very small,” said Neivelt. According to Estonian press, Hansapank wants to buy Lithuania’s Taupomasis Bankas in order to increase its size.

The third biggest bank in Estonia is Optiva Pank, which was recently taken over by the Finnish banking and insurance group Sampo.

Hansapank’s market capitalization is 680 million euros ($607 million). The present market capitalization of Uhispank, Unibanka and Vilniaus Bankas is 5.2 billion kroons ($304 million), and their total aggregate assets amount to over 46 billion kroons.

Kristi Liiva, spokesman for Hansapank, said that although Hansapank’s market share of loans and deposits is smaller than Uhispank’s market share, its market capitalization is bigger due to its other activities like, for example, leasing business. Hansapank controls 70 percent of Estonia’s leasing market, and approximately 30 percent of Latvia’s and Lithuania’s leasing markets.

SEB’s total offer for the three banks amounts to 3.7 billion kroons, 1.2 billion of which is offered to Uhispank’s clients. While SEB intends to pay 41 percent over the last closing price of Uhispank’s share on August 25, the total amount of premiums for 33 million Uhispank’s shares is about 363 million kroons.

According to the business daily Aripaev, two-thirds of the shares belong to foreigners through foreign accounts. Uhispank has a total of 4,399 shareholders, 92 percent or 412 of which are retail customers. Aripaev believes that one-third of the money received from the sales of Uhispank shares may stay in Estonia.

According to Maris Lauri, an analyst from Hansapank, the big supply of money on the local market after the SEB’s offer may result in a short-run decrease of interest rates.

The price of Uhispank’s share increased by 37.41 percent from 27 kroons on Aug. 25 to 37.10 kroons on Aug. 28, when the news on SEB’s decision was announced. Although the price of Hansapank’s share increased only by 3 percent during the same period, the turnover of shares traded was almost 3 million kroons more than Uhispank’s turnover.

Jaak Raivo, director of capital market division at Uhispank, said that a number of small shareholders saw the opportunity to earn 10 kroons per share over the weekend and sold their Uhispank’s shares at once.

“They bought Hansapank, Merko, Norma, Viisnurk and Kaubamaja shares in return, because they saw new opportunities in these companies, which will soon be sold to foreign investors. Many investors believe that Hansapank will soon be taken over by Swedbank,” said Raivo.

Raivo said that a lot of companies are planning to leave the Tallinn Stock Exchange including Norma, Merko, Viisnurk, Klementi, Baltika, Rakvere Lihakombinaat, Optiva Pank, Reval Hotelligrupp, Estiko and Tallinna Kaubamaja.

“Most of them are leaving due to foreign investments. The few big companies which stay will be included in the big Scandinavian stock exchange list. Some big companies, such as MicroLink and Hansa-tee, will probably enter the Tallinn Stock Exchange at the same time,” he said.

Source: http://www.baltictimes.com/news/articles/2512/