Good afternoon, and welcome to this investor webinar. My name is Tarmo Karotam. I'm the fund manager, and with this webinar, I plan to share more detailed information about the intended issue of new units by private placement. The webinar is structured in a way that will first summarize the reasons why we are doing it, what we are aiming at, and since we have received quite a few questions and remarks, then the second half of this webinar is intended for a Q&A session where the questions have been summarized and so have been the answers to these questions. So, I hope that most of the questions I can answer throughout this webinar. In case there are more questions outstanding, then you're most welcome to write them in the chat box, and then I will try to find them at the end of the presentation. So, some of this information has also been presented in the previous presentations, but I will just go through it once more, the reasons for what we are doing right now. So, it is also clear that, you know, we've had quite a challenging year with the expensive bond and the high vacancies last year, but we are in the process of improving our occupancies, signing new leases, and now going further. The goal is to improve the capital structure of the fund, and hereby we think we're ready for a small capital injection by our current new investors who believe in the potential of Baltic Horizon Fund. As well, throughout the past periods, we have been aiming to manage the LTV. We continue to manage it since it is still much higher than we would prefer. And we maintained continuously a target LTV of 50%. We have aimed to refinance some of our expensive debt, and the way to achieve lower LTVs is through amortization, maybe some repayments, and that continues to be our main goal as well. So overall, what we say internally is that last year we were in what we call a red zone when we had a lot of different aspects to manage, a lot of uncertainty on the future. This year we ourselves think that we're in a kind of a yellow zone where many of the aspects of our issues that we've had over the past 12 months have been managed. We are signing new leases, we have several other negotiations ongoing to fill up the S27 building with anchor tenants, and other vacancies that we have. So we see that our portfolio, many of the properties we have also sort of transferred into the new cycle. For example, Postimaja and the cinema building where we have recently signed new leases, long-term leases with full occupancy, and that's the name of the game to bring our properties that we believe in, to have long-term potential into the new cycle. And that also really means our strategic office buildings with long-term tenants and our strategically centrally located assets, also Europa and Galerija. Yes, it has taken more time, but we believe that we can achieve the long-term results that we're aiming for. Currently we're in the process of refinancing the EUR 8 million bond. It's been also quite a big effort to do that so that we have, by the beginning of July, completed the redemption of the first tranche of the bond, meaning that of the EUR 42 million that was rolled over last year, we have EUR 22 million remaining. We continue also to look for solutions for the EUR 22 million bond, which is outstanding after July. Last but not least, we know that through our negotiations with the tenants, in some cases, we achieve an agreement where tenant invests. In some cases, we also need to contribute as a landlord, and going forward, we need to be ready for additional CapEx investments as well. These are all the reasons why we are currently planning these activities. So we do see that we can maintain a goal of achieving at least 90% occupancy by this year, and the goal for next year is 95%. So, in some, you know, in more detail, we think that the effective solution to stabilize the fund further is threefold, and is to dispose of a non-strategic asset that we have in the portfolio of a size of approximately EUR 10 million, then refinance some of our more expensive loans, and extract a bit more financial sort of liquidity through this process of up to EUR 5 million, and then get a capital injection from the current new investors of approximately up to EUR 10 million. That really depends on the market price. It can be as well a bit lower. As we have noted, internally, we believe in the future of the fund, and as well, the management team is planning to support the fund and also invest fresh equity into the fund in this process. So once again, the way we are doing this is to, you know, feel that we are in a green zone, that we can welcome tenants, we can manage our debt, and through that, become again the dividend payer during 2025. So just a bit more on the reasons why currently we are planning a private placement and the public offering. So since Baltic Horizon was listed in 2016, we have had approximately, I think, 10 issues, different kinds, both private placements and public offerings, and at different price levels. So we're following a Prospectus Directive, we're following the regulations and the guidelines, in order to do these things. Now the main difference between a private placement and a public offering is the efficiency. What private placement really is is that it is targeting a more limited number of investors, usually with higher tickets. They can be current investors, they can be new investors, and it can also target up to 149 retail investors per EU country. So let's say EU country, which is Estonia, Latvia, or Lithuania, in this context, and that doesn't include—this number doesn't include institutional investors, such as banks or pension funds. Now, public offering is a much wider offering, and it's a longer process, and what is also different is usually the amounts that these offerings are targeting, giving you very limited amount of new capital that we are, you know, aiming to raise in this process up to EUR 10 million. Then, we don't see the efficiency in going through a public offering process, which in addition will require a much more larger undertaking, with a full prospectus and usually in several languages, engaging also a wide variety of investment banks and auditors with all the cost associated. So structurally, private placement is a much, you know, standardized simpler procedure that ensures, yeah, much more cost-effective and swift process. So our experience also in terms of cost and timeline is also shown in this table, between EUR 10,000-EUR 20,000 for private placement, mainly legal fees, but when it comes to a public offering, the cost can be up to EUR 200,000 or even more, depending on what are the fees with investment banks and the auditors. So again, this is, you know, nothing sort of that we haven't done before, and I understand there are a lot of questions from the investor base, so what to do, you know, and I hope, you know, it is understandable why we're doing this currently or why we are asking actually to be more precise, why we are asking investors consent to be able to do this throughout the remainder of 2024. So, in regards to some of the questions then, and we have summarized here some of these questions and offered answers that we believe or should be quite comprehensive to read and understand. So some of these answers can be a bit repetitive, but I will try to go through this in the next few slides. So there has been a question of, you know, why is the capital raise needed? And once again, you know, we're, we are taking, you know, several measures in order to further stabilize the fund. You know, one is potentially selling a non-strategic property. One is refinancing some of our debt, amortizing our loans. And the third avenue that we have to improve the stability of the fund is a capital injection. So, that will allow us to invest into our properties to welcome new tenants in case needed, and lower the vacancy of the portfolio. And, at the same time, it's been quite an effort to that we are in a process to repay the EUR 8 million bond with additional refinancing and the cash that the fund currently has. So once again, the name of the game is to increase our income and reduce the cost of debt. And, the process has been ongoing and will be ongoing also for the coming quarters, coming periods, in the future. Why are we planning a private placement and not the public one? So, private placements are cost-efficient in nature, usually preferred to be offered to institutional or larger investors with higher commitments. We do need to follow strict rules which are applicable to this and that. Our legal team is monitoring and preparing. Here I can also say that if investors are interested in the offering, we can take note of this. And some investors have reached out to us. So if an investor is interested, then we can consider the offering, including these investors in the offering. And last but not least, if investors are interested and believe in the future of Baltic Horizon Fund and the recovery of the unit price and the results, then investors can defend their position also by simply acquiring up to 20% of additional fund units from Nasdaq Tallinn or Nasdaq Stockholm from selling investors. I've also made this note before, but there are still quite a few Swedish investors that are selling, or Swedish background investors. We have noticed quite a few Baltic investors actually on the buy side. Furthermore, the 90-day average is a longer-term average. It can be noted that, if one is interested, then a partial increase in units can also be obtained from buying in a market that even at cheaper prices than the 90-day average unit price calculation could be in the future. So there's been a question. So why still are you planning the private placement? Because the unit price is low and has a high discount to the NAV. So it is true that the unit price is at the low end and much lower than what we believe the true value of the portfolio, you know, could be, when the various issues regarding the occupancy and the bond will be resolved. But you know, at the end, we are not able to control the market price. And the 90-day average pricing mechanism has been something that we've also done before and that some of our largest investors are accustomed to. So it does even out and it does remove some of the, let's say, inefficiencies or big fluctuations. So in that sense, it's quite the average is quite a normal way how to complete these offerings. You know, we believe that, you know, having done what we've already achieved over the past 12 months, then taking action now is ultimately the right thing to do and in order to help improve the operational results of the fund and work on the recovery of the unit price in the future. So the question, who will be invited to participate in the private placement? So again, private placement is targeting investors known to us with lots of tickets, usually professional and institutional investors. But the offering can also be extended and it can be targeted up to 149 retail investors per EU member country. The question has been, are the management board members or representatives of the management planning to acquire units? Yes, we have discussed this, and several Northern Horizon team members are interested in supporting the fund with additional equity to improve the liquidity. We think that, or we believe by estimate that approximately half of, or up to a half of the commitment of the commitments will come from current anchor investors and the team members. So, we want this offering to be a success, and hopefully we can achieve as well to have interested investors to defend their positions in these ways which are possible for them. The question has been that why is private placement in the interest of smaller investors? And, again, we believe if we improve the capital structure of the fund, that will give more confidence to the market that the recovery will continue. And you know, we are working on three avenues, disposing an asset, refinancing our debt and with new equity. So again, the aim is to become a dividend payer in 2025, with these achievements, also on the income side of the fund. It is also the case that investors who don't want to defend their position then, and they will be diluted to a certain extent. But again, we have limited this offering to up to 20%. So we don't know if it's going to be between 10 or 20 of new units today, offered in case we receive, of course, the mandate from the investor base in the next upcoming investor meetings. So then, this is also the case. Also, because the market price is so low, you know, we are not planning to, you know, go into large capital raising and to threaten or to go through this large, long-term process. So that the dilution could be much larger than up to 20%, which currently could be the case for investors who are not interested in investing with us going further. As said before, smaller investors can, you know, defend their position by simply, you know, buying from the market and even possibly at cheaper levels when compared to the 90-day average price. But, as mentioned before, you know, investors that we're targeting are usually known investors to us. The offering itself can also be extended to up to 149 retail investors, per EU member country. That comes from the regulations, which are related to the private placement. So, you know, there's been a question that does all of this affect the unit price? So, we don't, you know, control the unit price, so we don't really know how it is affected short term. So, it could be that some investors would not like to join this new offering, or buy units from the market. So, and they would sell. But there could be as well that investors that are interested in buying at a cheaper level to maintain their percentage in the fund, in the total units pool, or maybe even increase it. So, but as said before, the capital injection is one of the tools which will help us to improve the financial standing of the fund and for the team to feel much more comfortable that we can do what we are, you know, have been planning to do in terms of increasing the NOI of the fund. When tenants are moving in and when new tenants are being signed up to move into the vacancies. So, there's still quite a bit of work for that to be done. But that's the goal of the fund team. And we can then plan our activities also more precisely. So we do believe that with the activities that we're doing right now it should improve the operating results of the fund. And hopefully that should also then be reflected in the unit price, which is currently, as you all know, at a very low level. So you know, I've had several questions that what can I do, you know, as an investor to maintain the holding that I have then. We do, you know, we do recommend that in case an investor believes in the fund, then there is a very flexible opportunity to buy up to, you know, 20% of additional units from the market. We have also the ability to target up to, yeah, again, 149 retail investors. So, we hope that this will accommodate all the needs of the investor base, going forward. What will happen if the shareholders vote against the private placement? So in case the management team continues to work on the other two avenues that we have, disposing an asset still in a quite challenging market when it comes to potential transactions at good prices. And then we finance the expenses that we currently have, and mainly through cooperation with the banks and cooperation with the bondholders. There's also been a question that, why do we just not close down the fund? We've definitely, you know, considered it and we've discussed it extensively. But, again, we already last year, end of last year, decided that, with a lot of hard work and good cooperation with the partners, with the investors, we believe that there is a future for Baltic Horizon. There is a, you know, full goal to become a dividend payer again. And also having received some offers for our properties, and we do see that it is not really prudent to accept these prices at this period of time. As very limited amount of value can be then extracted from this process, which can be as well costly and lengthy in nature. And what gives us much courage and much sort of confidence for the future are these, you know, tenants that we have been signing up. You know, we've made them many times, the new anchors for our properties, the lease, Apollo Group now, in Meraki, Narbutas and several others. And the current negotiations that are ongoing with the tenant in our vacant properties. Yes, it will take a bit of time, but we do see as well that the markets are turning. And hopefully Euribor will continue to decrease. That should improve as well our tenant situation, consumer spending numbers as well eventually the valuations and also the potential price that we could receive for any of our assets that we would like to sell. The fund is currently not in liquidation mode. It's not planning to exit in any way. So hereby we are in the process of working on these three avenues: increasing the NOI through new tenants, decreasing cost of debt, amortizing the debt. If investors believe in it, then have the mandate to increase the capital base and get also a fresh equity capital, limited fresh equity capital injection into the fund. So this concludes the presentation that I have prepared. Let me see if I can take some if there are some other additional questions with some questions that I haven't answered already. There's a question of the management team and how many shares the Baltic Horizon we own in Baltic Horizon Fund. So I can say that the number is in hundreds of thousands. The number is more than 500,000. And also the question is that who you know haven't checked the latest latest let's say report but I would say today is definitely more than 500,000 closer to I would say even to 800,000. So around, I think, shy of EUR 1 million. So, I think that's an answer I can give, at this moment. So the question is that why don't we sell more of our properties, instead of doing this capital increase? So I would say that, once more, we, we believe that, with some of the work, you know, that, that we are doing, we can, you know, within 12 months' time, we can improve the value of, of many of our properties. And this is not the time to sell. Also, one needs to keep in mind of the, of the bank that, that we have and, and, you know, some of the, some of the, let's say, offers that we have received, are, you know, somewhat higher than the bank debt, but, but not a lot. So that will also not solve our problem to, let's say, increase the financial liquidity or strengthen the financial position of the fund. So, you know, we're still considering, you know, selling some smaller non-strategic assets, but it's also a question of, you know, if you start selling larger assets, that then it could signal even, you know, the larger, you know, potential liquidation of the fund, which we don't believe that we want, you know. It's in the best interest of the investor base as a whole. So, we believe in the future of Baltic Horizon, and we believe that it should remain listed. It should become a dividend payer again. There's a question on the LTV that currently we are quite at the high level and our target is 50% or below. And why are we then thinking of potentially paying dividends next year, whereas you know we could deleverage the fund further? I think that's a very good question. The thing is, you know, we, it's a balancing act, I would say. And the question is, you know, how much, you know, and in which period of time do we believe that achieving, let's say, 45% or 40% LTV is the best course of action? You know, and we do know that our investor base is expecting a dividend. It could be a small dividend. So it's or a bit larger. So eventually it will be a balancing act. It depends on so many factors, you know. It depends on the valuations. It depends on the cost of debt, and so forth. So, as we said, you know, if we, that's our aim, is to become a dividend payer in 2025. If our plan works out and if we are able to achieve, if the market supports it and, but we do see that it could be possible. Yes. I would say that in terms of LTV, so, you know, our main goal is, of course, 50%, but that we want to achieve, no matter what. Question is, you know, would you go down to 45 or would you go down to 43 or 47? So that's something then to be decided. Again, it depends on so many factors and then it depends also on a timeline, and that needs to be balanced out. So there's been a question that we in the market to potentially buy new objects. So, you know, we are a market player. So, of course we keep an eye, and in case, you know, something very attractive comes along, potentially we could build a case for it, but it's definitely not our priority. You know, it's something that we have to be in a, we keep our eye on a market. But sometimes, a few times I have said during these webinars that we do look into a longer-term future than just, you know, 12 months and potentially, you know, we need to have also a three- or five-year, you know, view on where we want to be. And let's say in today's market where buyers and sellers are still quite far away from each other, it will take time, you know, for the new equilibrium to find itself and potentially then we will be also in a better position to consider different investments. But currently the priority is to stabilize the fund and through these three avenues that I've discussed before. So there's been a question on that we have acquired strategic assets at high prices in the past, for example, Postimaja and Galerija Centrs. So, yeah, high prices is, let's say, a relative term and I think around EUR 3,000 per square meter, you know, the central locations cannot be considered, you know, too much of a high price, also considering the replacement costs today. One has to look into more specifics here. And, for example, in Galerija Centrs is of course our major disappointment that Riga Old Town and Riga itself has been affected by COVID and other things very directly, lack of tourists, you know, no Russians spending money again and the property itself has been in a process of realigning its investor-visitor base. It's of course very disappointing that it has taken so long and it will still take time. But yeah, and now it's, we're almost in 2025, you know, almost five years after we acquired the property and it has been recovering much slower than anticipated. But again, you know, if we look at in a longer term perspective and we look at it from the point of view that, you know, when the property will be occupied by tenants such as My Fitness, you know, ARKET, the Food Hall, you know, some of the other, you know, anchors that we're planning to bring in for a period of, you know, 10+ years, then that's where we get our sort of motivation and excitement. Yes, it will take time. Yes, it will take some investments. But, you know, we still don't believe that, that Riga Old Town will, will remain in this current situation or, you know, it has been already slightly improving, but not visibly. But, but, but we believe that the, the value will be restored, but yes, it will take a bit of time. At the same time, you know, when you put together a portfolio of EUR 300 million- EUR 400 million in the Baltic States, you know, you are, you know, as a, as a fund management team, buying throughout the cycle. And, you know, yes, some, some investments you can make cheaper, some investments a bit more expensive. But, but the idea is to believe in what, what you can own long term. You know, we're not a developer. We're not buying, holding for one, two years and, and selling. So that's, that's something that is not part of our core strategy. So, the strategy is to be a very long-term holder of certain properties and to maintain them, to uplift them at certain periods and then bring them to the next cycle and throughout then a period of economic growth and improvement of people's disposable incomes. Also believe in the indexation of rents and in the increase of rental prices in the coming years when Euribor starts to stabilize and other, let's say, major events in the region find their, let's say, new solution. So, as we have said, you know, in the private placement, you know, we are targeting mainly, you know, known investors, larger and larger tickets. However, you know, we can target as well 100 up to 149 retail investors. So we try to accommodate their wish as well, in case they really want to participate in the offering, you know, at the price, which could be, you know, even larger or higher than they could acquire in the market. We are, you know, processing the requests and are able then to contact these investors if they show interest in the due time when we actually do receive the mandate. So the question I guess is that, has the management team been buying in the market in the previous periods? And the answer is yes. But we also plan to, you know, support the fund with new fresh equity, as much as we can. So it's a question again on the 90-day average pricing. You know, this is something that, you know, is a market standard. You know, you can argue, is it low or is it, can it be done higher or should we even give more discount to you know, some investors, you know, that could come in with bigger tickets. So, we haven't done anything specific, you know, like that, you know. So, it is up for the investors to decide really. If the investors believe that 90-day average is not the right one, then, you know, we will see what would be the right one. So this is something that has currently put on a vote. So, I don't know how to comment more on this. So there's been a question that, you know, is the NAV at the right place? So, NAV, as you know, in our case, and in many cases is based on the financial results of the fund and also being quite a bit affected by the external valuators. We've had Colliers as our valuator. We have had Newsec as our valuator. Now, you know, we have also received unsolicited offers, as I mentioned, you know, throughout these periods for our properties. But this is something where we will not sell. And we believe that's not the market price. What the valuators are doing is trying to understand through their methodology, you know, what could be the potential market price where buyers and sellers meet. So, if we get an offer for our property, that doesn't mean that we need to, you know, book this offer and reduce our NAV. So that's not the case. So NAV is calculated by or affected by the valuations. And it's also not an easy job for the valuators to you know reflect the market price. In many cases, we have also argued with the valuators that we have actually received higher offers, you know, for the properties and that the you know NAV should be adjusted upwards. But there's various arguments and discussions around that, so in both sides. So we believe that you know the NAV is trying to reflect what would be the where the market is meaning that where buyers and sellers can meet today considering the different properties that we have. So there's a question on what alternatives have we considered for this private placement? So, I can answer this that you know, private placement to this limited amount is part of the you know, effective solution, what we call. So it also you know, entails you know, refinancing some of our loans, some of our also the bond and disposing a non-strategic asset. So you know, I guess alternative could be that we just do a big public offering and at this current low market price and the danger of let's say, diluting other investors who are not participating is, it's much much higher than up to 20%. So we don't believe that this is also right. So it is something that we have been yeah, discussing for quite a bit of time. So we see that the combination is probably the best effective solution here. As we're fully aware of, the potential dilution for the investors who are not willing to participate in this or defending their position in buying more units from the market. There's a question on S27 building, so the answer there is that we are in discussions with an anchor tenant and there's been several visits throughout the past, I think, six months and we aim to announce positive news shortly. Once more, maybe this is a question on the NAV. So the valuations are affecting the NAV and due to the bond, the cost of, I think, the debt on average is higher than all of us would like it to be. So the valuators are using in their method, you know, WACC method, cost of debt, long-term cost of debt and long-term cost of equity that can be obtained on the market. So I believe our valuation should be all correct. So there's been a question here to when improving capital structure, you know, and so that are we able to do it organically? So yes, we have been doing it organically, as you know, as much as we have been able to. But this small injection, what we believe is of new equity will really bring us to the comfort zone, if you wanna put it that way. So to really have a strong position for any. And hopefully there will be no negative surprises, but you never know. So that's what we really wanna do with this activity. There's a question on the net leasable area of Coca-Cola Plaza. So this mainly relates and there's been a decrease in the net leasable area. So that is related to the new leases that we have signed. So they are structured a bit differently. The price is also actually higher. So let's say it's because of certain areas that are not considered net leasable area anymore. So that's the reason for it. There is a long question here about, again, the pricing mechanism of the private placement. So, you know, it is the case that investors who are interested in the future Baltic Horizon and supporting the fund, you know, and see the potential, then there is a possibility to, you know, approach us with the request to participate or buy from the market to keep the ownership at even cheaper prices than the market 90-day average. So, this is something which is the case and, if the general meeting of investors approves it, then I think the overall sort of consensus is known for the management and we're following the Prospectus Directive and legal advice in our activities going forward. So again, this is nothing new to us. We've done it in several cases also in the past. We've done private placement, we've done public offerings, and I think I've explained quite, quite thoroughly the reason why we're doing a private placement right now or planning, planning to do. So, I think there's a last question. I'm trying to see what, what angle is this asked from. So, so I, I think from my position, you know, this, this offering is, is really to, to, for, you know, for investors, you know, to, to help the management, and, and the fund, to, to stabilize its, its, its business. So we've, you know, paid back almost half of the expensive bond. We continue also to find solutions for the, for the remainder of the bond. Of course, we continue to refinance our properties at the best possible levels and sign up new tenants, minimize the CapEx investments and bring the fund, you know, to a more stabilized position, over the next period. So I don't see that we are in this private placement. We are selling or hypothetically even selling any of our properties. So, most of the properties we definitely want to keep long term. We see a lot of value can be still extracted. We don't believe that it is time to sell the properties and, as mentioned before. So, you know, we do recommend and propose to investors if we get the mandate to consider private placement, in the periods that are coming, then to also consider defending the positions so that they will not be diluted. Again, we've, you know, tried to keep this process and also the potential dilution to a minimum because also we believe that the unit price potentially could increase much more than even the theoretical, you know, or practical dilution effect if we stabilize the fund and have stronger, much stronger liquidity position to go through the next six to 12 months when, you know, many of our tenants are moving in and it is a low income period, currently. But again, the name of the game is to increase the income, sign up further new tenants and decrease the cost of debt and have the, you know, stronger liquidity position to do that. I think one more question. So, it was a question about when we're refinancing our bond, which, you know, was in the period of the beginning of 2023 and when capital markets were not working, Euribor was increasing. So pretty much the worst time to do it. We were considering as well, you know, refinancing it with, you know, through a big public offering, with all the press coverage, all the rest, the difficult environment. I think the only reason we didn't do it was because the amount was quite large. So, EUR 42 million was quite a large amount and there was no way we could like, let's say, decide that, okay, we will only do EUR 40 million or we will only do, you know, EUR 35.2 million. So it was a full amount and we found, let's say, a solution that we could find at that moment. Yes, probably today you would be able to refinance or, let's say, get the bond out at a cheaper total cost. I think there's market players who have also done that, even though at much smaller levels. So I think my comment on the bond is that, final comment maybe is that, we have paid back already almost half of it and, by 8th of July, we hope to confirm it. We continue to search the solution for the remainder of the bond, and that remains on our desk as well of something that we need to resolve, during the journey ahead. So thank you very much for the questions. Hopefully this was informative and happy to answer any questions, over email, in case there are some. So, once again, welcome you to participate in the general meeting. Maybe just a small comment that regularly, for these cases, according to the fund rules, this needs to be discussed in two general meetings and in the first one, the quorum requirement is probably higher or historically has been higher than the investors participating in the voting. The voting process as well is quite. Preparation for it is quite technical. Documents need to be presented, the power of attorneys or extracts of some registries. And so it's quite a cumbersome process. So most likely, this will be discussed and decided on in two meetings. And I think the first meeting, we will not have a quorum potentially in place. So, the question is that what can we decide there? And if we cannot decide anything there, then it will be put on the vote in the second meeting, later on, during this summer. Thank you once more and all the best. Keep in touch.