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Kesko divests Estonia and Latvian properties

Published 25 May 2017

Kesko has divested seven store sites used by Kesko Senukai in Estonia and Latvia to UAB Baltic Retail Properties.

At the same time, Kesko has acquired a 10% shareholding in the property investment company.

UAB Baltic Retail Properties' main shareholder is CPA:17 - Global, a property investment fund managed by the US based W. P. Carey Inc., with a 70% ownership interest. The three owners of the property investment company remain in the company as minor shareholders with a total shareholding of 20%.

UAB Baltic Retail Properties has already earlier been an important lessor to Kesko Senukai in Lithuania. In connection with the arrangement, Kesko Senukai has once again leased store sites, which the investment company had already previously owned, as well as new store sites, which have now been transferred to the investment company for its use on 15-year leases with extension options.

The entire deal is valued at approximately €174 million. The selling price of the properties owned by Kesko was €64 million, generating a profit of €50 million on the divestment. Kesko Group's net cash inflow from the arrangement before tax is approximately €58 million.

Kesko Group leases a total of 19 store sites from the property investment company and as a result of the arrangement, lease liabilities increased by approximately €124 million. The arrangement will not have any significant impact on profit.

Kesko Senukai is the Kesko Group company responsible for building and home improvement trade operations in the Baltics and Belarus. Kesko Senukai is the clear market leader in the in the region with 54 stores. In 2016, Kesko Senukai's sales were close to €600 million.



Source: Company Press Release