TALLINN - The Arco Vara real estate group on June 4 launched an initial public offering in Estonia and Latvia, announcing it would use the proceeds from the sale to expand its business into Lithuania and other East European countries. Arti Arakas, an owner and chairman of the group's supervisory board, said the company expects to raise some 1 - 1.5 billion kroons (64 - 96 million euros) for new projects, depending on the final share price and the quantity of new stock to be issued. CEO Viljar Arakas said the company sees unique opportunities lying ahead in Bulgaria, Lithuania, Ukraine and Romania, where the company has been active only in the real estate brokerage business.
"Arco Vara's strategy is to become a leading residential property developer and real estate agent in the Baltic states and selected countries of Central and Eastern Europe. The group has already achieved this in Estonia and Latvia, and it is in the process of developing its operations in Lithuania," Arakas said in a press release.
The combined offering consists of 34.4 million existing and new shares. Up to 6.9 million existing shares will be sold by existing shareholders and 27.5 million will comprise new stock.
The shares on offer represent approximately 70.59 percent of the company's share capital prior to the IPO and approximately 46.33 percent of the share capital on completion of the offering, assuming that the upsizing option and the over-allotment option are exercised in full, Arco Vara said in a press release.
That would leave 53.7 percent in the hands of the three present owners: Arti Arakas, Richard Tomingas and Hillar-Peeter Luitsalu.
The IPO price will be in the range of 37 - 44 kroons, with the final decision to be made by the company and shareholders along with the investment banks coordinating the book-running phase.
Trading in the shares is expected to start on the Tallinn Stock Exchange on June 21.
Arco Vara posted a net profit of 217 million kroons on consolidated net sales of 484 million kroons in 2006.
The Arco Vara group is a real estate developer with an integrated business model that also encompasses real estate services and construction.
