Comments on Arco Vara AS announcement (4 February 2013) regarding the termination of Tivoli residential development contract
Arco Vara AS published a company announcement on 4 February 2013 by which it claims that Tivoli Arendus OÜ, a member of Arco Vara Group, has terminated a contract for the design and construction works of apartment houses in Tallinn, Narva Rd 67 land plot (so called Tivoli residential development) because of an alleged breach of contract terms by Nordecon AS. Nordecon AS has published an announcement of the signing of the contract on 22 May 2012 (https://newsclient.omxgroup.com/cdsPublic/viewDisclosure.action?disclosureId=507185&messageId=622519).
Nordecon AS hereby announces that the information published by Arco Vara AS is untrue. Tivoli Arendus OÜ has indeed sent a notification for the termination of the contract, but does not contain sound legal arguments, is based on false assertions and is thereby not valid. Nordecon AS is not in breach of the contract terms. In reality Tivoli Arendus OÜ has landed in economic difficulties, has not been able to fulfil its contractual obligations towards Nordecon AS (i.e. has not granted a building permit which has led to delays in time schedule and problems reaching agreed upon construction volumes and has also been repeatedly late with payments for billed works) and is now trying to rid itself of the burdening contract using groundless pretexts. Nordecon AS is considering backing away from the contract and seeking compensation for damages done by Tivoli Arendus OÜ.
Nordecon is a group of construction companies whose core business is construction project management and general contracting in the buildings and infrastructures segment. Geographically the Group operates in Estonia, Ukraine and Finland. The parent of the Group is Nordecon AS, a company registered and located in Tallinn, Estonia. In addition to the parent company, there are more than 10 subsidiaries in the Group. The consolidated revenue of the Group in 2011 was 147.8 million euros. Currently Nordecon Group employs more than 700 people. Since 18 May 2006 the company's shares have been quoted in the main list of the NASDAQ OMX Tallinn Stock Exchange. Raimo Talviste
Nordecon AS
Head of Finance and Investor Relations
Tel: +372 615 4445
Email: raimo.talviste@nordecon.com
www.nordecon.com
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