Estonia, Real Estate

Arco Vara AS announced at the beginning of November that it will sell its full holdings in its subsidiaries Arco Vara Kinnisvaraburoo AS, a subsidiary registered in Estonia, and Arco Imoti EOOD, a subsidiary registered in Bulgaria, to the management teams of these subsidiaries as of Jan. 1, 2019. The transactions have been completed and Arco Vara Kinnisvaraburoo AS and Arco Imoti EOOD are no longer part of the Arco Vara group and as of Jan.1, 2019, license agreements have entered into force, according to which the former subsidiaries have a right to provide real estate brokerage and evaluation services under Arco Vara trademark, the company told the stock exchange.

Arco Vara Kinnisvaraburoo AS was acquired in equal parts by St Elmar Invest OU and OU River Kinnisvara. St Elmar Invest OU is controlled by Elari Tamm, who has been a member of the management board Arco Vara Kinnisvaraburoo AS from the beginning of January 2018. Arco Imoti EOOD was acquired fully by Evgeni Plamenov Vasilev, who has been a long-term manager of Arco Imoti EOOD.

The total consideration from selling the shareholdings in the aforementioned subsidiaries was 300,000 euros and has already been paid. Under the license agreements, Arco Vara AS will be receiving a turnover-based license fee.

According to audited results for 2017, the sold subsidiaries made up 2.3 mln euros of the group's revenue, that is 12.5% of the total revenue of the group, out of which the Estonian real estate agency accounted for 8.8% and the Bulgarian real estate agency for 3.7%. During the last periods, both subsidiaries have been operating close to zero results, therefore their separation from the group will not have a significant effect on the group's profit, assets and obligations, Arco Vara said.