INVL Baltic Real Estate
Notification on material event
Regarding INVL Baltic Real Estate’s debt level
The closed-end investment company INVL Baltic Real Estate (hereinafter may be referred to as the Company) gives notification that, after relinquishing ownership of the IBC Business Centre in Vilnius on 6 March 2020, the Company temporarily is not in conformity with the largest allowed level of debt specified in INVL Baltic Real Estate’s Articles of Association.
The value of the transaction was EUR 33 million, of which EUR 5.7 million is allocated for loans reduction.
The Articles of Association envisage that up to 50 percent of the value of the real estate belonging to the Company may be borrowed on its behalf. The Law on Collective Investment Undertakings currently in effect allows a real estate fund’s ratio of loans to real estate value to be up to 80 percent.
Taking preliminary data for 31 December 2019, at the time of this announcement INVL Baltic Real Estate’s ratio of loans to equity was approximately 56 percent.
The Company gives notice that the specified ratio was exceeded because, following the sale of the IBC Business Centre, the real estate owned by INVL Baltic Real Estate decreased, but it was replaced by a much more liquid asset – cash.
The Company’s management company, INVL Asset Management UAB, is taking measures and preparing an action plan upon whose implementation would eliminate the discrepancy in the Company’s loan to equity ratio.
We draw attention to the fact that the interests and rights of the Company’s shareholders have not been violated as investors’ risk decreased with the replacement of lower-liquidity real estate by higher-liquidity assets (cash).
The person authorized to provide additional information:
Real Estate Fund Manager of the Management Company