OEG sold a subsidiary that owns the Hilton hotel complex building in Estonia

Posted on 15.07.2016

OEG group company Jessy Investments B.V. entered into an agreement to divest the 100% 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 48 million euros.

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 OÜ 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 OÜ 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 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.


The financial results and information of the subsidiary being sold

Kesklinna Hotelli OÜ 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
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
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
Nominal share capital 3 3
Other reserves 5 5
Retained earnings -981 -524
TOTAL EQUITY -973 -516


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 OÜ completed the construction of the hotel complex and leased out the building on a long-term basis to Olympic Casino Eesti AS and OÜ Fortuna Travel that operate a casino and a hotel in the building.


Overview of loans taken by Kesklinna Hotelli OÜ 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

Kesklinna Hotelli OÜ will return both loans during the transaction.


Madis Jääger
Olympic Entertainment Group AS
Tel + 372 667 1250

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