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Issue of new shares of EfTEN Real Estate Fund III commences today

Today starts a public offering of new shares of EfTEN Real Estate Fund III AS, a company on the main list of the Tallinn Stock Exchange, for issuing to natural and legal persons new 850,000 ordinary shares with offering price of 17.8 euros per share. Along with raising new capital, the fund plans to expand the shareholder base.

„As usual, existing shareholders have the pre-emptive right to subscribe for new shares in EfTEN’s third fund, up to the proportion of the pre-issue shareholding of a particular shareholder, but as we have seen in the past, we have also been able to partially satisfy the subscriptions of new shareholders. In determining the offer price, we used, as in any previous share issue, the fund’s book value, which is lower than the stock exchange price. In June, the fund will pay dividends on shares currently traded on the stock exchange, but this time the new shares will not be eligible for dividends. The new shares give the right to receive a dividend for the current and subsequent financial years,” said Viljar Arakas, Member of the Management Board of EfTEN Real Estate Fund III AS.

According to Arakas, the impact of Covid-19 on EfTEN Real Estate Fund III AS, which invests in commercial real estate, has been minimal, as the fund’s portfolio is well diversified and does not include, for example, accommodation establishments. “Residential real estate is currently gaining momentum in Estonia and it is common for commercial real estate to grow a little later. With the retreat of the pandemic, good prospects can be seen in commercial real estate, because of strong foundations of the Baltic economies. From shopping centers, where restrictions have been eased, we receive feedback from tenants that the recovery of turnover is better than expected,” Arakas noted.

The subscription period starts on 14 May at 9:00 (Tallinn time) and ends on 31 May at 16:00. Settlement of the offering (transfer of the shares to investors’ securities accounts) is scheduled for 10 June and expected listing of the shares and admission to trading on the Main List of Nasdaq Tallinn would happen on or about 22 June 2021. The subscription of the shares offered is carried out only through the account managers of Nasdaq CSD SE Estonian branch, who are offering respective services. The shares are publicly offered in Estonia only.

Existing shareholders of the fund i.e., the persons who have been entered in the list of shareholders of the fund in the Nasdaq CSD register as of 29 April 2021, have a pre-emptive right to subscribe for new shares in proportion to the sum of the nominal values of their shares.

In addition to refinancing the fund is eyeing new investments

In total, the investment portfolio of EfTEN Real Estate Fund III AS encompasses 15 properties: Pirita Pansionaat in Tallinn, DSV logistics centres in Tallinn, Riga and Vilnius, a sales and service centre of ABC Motors in Tallinn, two Hortes garden centres and Laagri Selver retail centre in Tallinn, Piepilsetas Logistics Centre and airBaltic headquarters in Riga, Evolution business centre, Saulės Miestas retail centre in Šiauliai, as well as three office buildings in Vilnius: Laisves 3, Ulonų and Rutkausko.

The fund will use the proceeds of the offering, i.a., for ending the 3 million euro bridge financing for the acquisition of the Pirita Pansionaat, as well as for refinancing a 1 million euro loan of the airBaltic office building, and financing with 0.7 million euros the construction of a separate building on the Saulės Miestas shopping center, where a franchise of KFC fast food restaurant would start operations. The remaining 10.4 million euros will be allocated for planned investments. The fund is negotiating a new real estate investment in Lithuania, for the total amount of 10 million euros, of which 5 million would be self-financing, but no binding agreement has been concluded.

 

The prospectus of the public offering is here (in Estonian): https://eref.ee/investorile/uute-aktsiate-markimine/.