On September 22, 2004 AS Viisnurk signed an agreement to sell its Wood Panels Division's assets to OÜ Desparo. After negotiations with different potential buyers, OÜ Desparo was chosen due to its best offered price and payment terms. AS Viisnurk sold the Wood Panels Division in order to focus on its core activity – furniture business. OÜ Desparo is related with the owners of the birch proccessing company in Pärnu – Lehtpuutöötlemise AS.

 

The assets of the Wood Panels Division consist of a sawmill, drying kilns and edge-glued panels factory. The assets are sold together with the land belonging to the Wood Panels Division, in total about 81,000m2. The land underneath the division is currently not registered separately in the land registry and it will therefore be separated from AS Viisnurk's Niidu 9 and Niidu 11, Pärnu land plots. The total transaction value is EEK 44,000,000 plus VAT. The parties have agreed on the following payment terms (all amounts without VAT):

 

- EEK 11,000,000 will be paid within two days from signing the law of obligations agreement (in Estonian võlaõigusleping) on September 22, 2004

- EEK 33,000,000 will be paid with the signing of the real right contract (in Estonian asjaõigusleping) which will be concluded after the documentation for dividing the land of the Wood Panels Division has been finalised. It is estimated that the signing of the real right contract will take place in the period of December 15-31, 2004.

 

With the signing of the law of obligations agreement, OÜ Desparo will obtain the right to use the assets but no ownership title will be transferred. With the signing of the real right contract, the ownership title of the assets will be transferred.

 

The balance sheet value of the Wood Panels Division's assets on August 31, 2004 was EEK 56,936,295. AS Viisnurk will therefore occur an extraordinary loss of EEK 12,936,295 from the transaction in addition to transaction related fees which are about EEK 1.9 million. The extraordinary loss will be accounted in AS Viisnurk's financial accounts after signing the real right contract. Viisnurk will use the receivables from the transaction to decrease the interest bearing liabilities related to the Wood Panels Division.

 

 

Additional information:

 

Andrus Aljas

AS Viisnurk

CFO

4478355

 

Toomas Tapupere

OÜ Desparo

Managing Director

5160004

 

Amish Mody

AS Trigon Capital

Associate Director

6679200