Estonia – Olympic sells subsidiary that owns Hilton hotel building in EstoniaBy Phil - 18 July 2016
OEG group company Jessy Investments has entered into an agreement to divest the 100 per cent holding in its Estonian subsidiary Kesklinna Hotelli OÜ that owns the hotel and entertainment complex building in Tallinn, where the Hilton Tallinn Park hotel and the flagship casino of OEG group, Olympic Park Casino, are based in.
The buyer is East Capital group company ECB3 Tallinn OÜ. The transaction price is €48m.
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 profit from the sales transaction, taking into account transaction-related costs, is approximately €17m. 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.
Olympic stated: “OEG group companies Olympic Casino Eesti AS and OÜ Fortuna Travel have entered into long-term lease agreements with Kesklinna Hotelli OÜ, whereby Olympic Casino Eesti AS and OÜ Fortuna Travel lease the building from Kesklinna Hotelli OÜ for operating respectively a casino and a hotel, and make monthly lease payments. Kesklinna Hotelli OÜ is not involved in any court or arbitration proceedingswhich could have a significant effect on the business activity of the company. The management board member of Kesklinna Hotelli OÜ 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.”