AS Tallinna Moekombinaat submits the reorganization plan to the creditors

 AS Pro Kapital Grupp has notified about the initiation of reorganization proceedings of its subsidiary AS Tallinna Moekombinaat by the ruling of the Harju County Court issued on 3 April 2020.In connection with the reorganization proceedings of AS Tallinna Moekombinaat, AS Pro Kapital Grupp announces that in the reorganization proceedings of the subsidiary, the Management Board of AS Tallinna Moekombinaat, in cooperation with the reorganization advisor, has prepared and submits a reorganization plan to the creditors for review and formation of position.According to the reorganization plan, the main reorganization measure is restructuring of the creditors’ claims, as well as the adjustment of the business model and the involvement of additional investments if necessary. The reorganization plan is planned to be completed within 10 years. In general, the financing of cash flow projects is long-term, which is why the 10-year payment period is in line with the logic of financing cash flow objects.Restructuring of the creditors’ claimsAccording to the reorganization plan, the creditors are divided into three groups: Group I consists of creditors with secured claims, Group II consists of creditors with unsecured claims and Group III consists of the shareholders of AS Tallinna Moekombinaat. According to the Reorganization Act, the claims arising from the employment contract are not restructured.The claims of creditors placed in Group I shall not be reduced in the part belonging to Group I. Claims are deferred and paid in instalments. Interest is paid on the balance of the receivable at the rate of 3.75% per annum.Claims of Group II creditors are reduced by 60% to 40%. Claims are deferred and paid in instalments. No interest payments are made on receivables.Claims of creditors placed in Group III are reduced by 80% to 20%. Claims are subordinated to Group I and II repayments. No interest payments are made on receivables.Changes in business operationsAS Tallinna Moekombinaat plans to continue the changes intended earlier in connection with new business directions and the improvement of the tenant structure.The structure of the building enables flexible spatial solutions for different areas of activity. Therefore, the T1 Mall of Tallinn shopping centre has the potential to expand the area of ​​office space, including the creation of co-working areas, as well as to provide public services and increase the share of the entertainment segment. Negotiations are also ongoing to find new tenants for retail space that would make the centre more attractive to visitors.With the changes in the current business activities, AS Tallinna Moekombinaat hopes to achieve a higher occupancy of the rental premises of the T1 Mall of Tallinn shopping centre, which would contribute to positive cash flows, satisfying creditors’ claims and, if possible, enable to make investments in the centre and thereby increase the number of visitors.Attracting investmentsAS Tallinna Moekombinaat plans to pay both current liabilities and restructured claims on the basis of the reorganization plan using current cash flow, but if this should not be sufficient to fulfil the obligations specified in the reorganization plan, AS Tallinna Moekombinaat has planned to attract additional financing in the amount of 3,200,000 euros.By applying the reorganisation measures, it is possible to overcome the temporary payment difficulties of AS Tallinna Moekombinaat and restore the company’s liquidity and sustainable management.Under the reorganization plan, all creditors are secured satisfaction of claims to a greater extent than in bankruptcy proceedings. The claims have been restructured in accordance with the law and court practice to the minimum extent necessary for the successful reorganisation of the company. In the event of the bankruptcy of AS Tallinna Moekombinaat, only creditors with pledged claims would receive partial satisfaction of their claims.If the reorganization plan of AS Tallinna Moekombinaat is approved, it will be possible to maintain a large number of jobs related to the T1 centre and create additional jobs if the plans materialize.As the reorganization of AS Tallinna Moekombinaat is a better alternative for all creditors, the reorganization advisor and the management of AS Tallinna Moekombinaat ask to accept and approve the reorganization plan. The creditors have to vote on the adoption of the reorganization plan. The final decision on the approval of the plan is made by the court.The balance sheet and income statement of AS Tallinna Moekombinaat as of 31 March 2020 have been attached to the reorganization plan, therefore we also included them in this stock exchange announcement. Before the spread of the SARS-CoV-2 virus and the establishment of a state of emergency in the Republic of Estonia, the company’s business was profitable. Since 27 March 2020, the T1 Mall of Tallinn shopping centre has been mostly closed, but will open  shops again on 11 May 2020.Allan Remmelkoor
Member of the Board
+372 614 4920
prokapital@prokapital.ee
 AttachmentTMK financials 31.03.2020