ARCO VARA AS - NASDAQ OMX Baltic

Working capital
Management believes that, taking into account the Group’s existing assets and financial condition, the
Group’s working capital is sufficient to meet all liabilities as they fall due for at least the 12-month
period following the date of this Offering Circular.
Bank loans
Year ended 31 December
Three months ended
31 March
(audited) (unaudited)
(EEK, ´000) 2004 2005 2006 2007
Bank loans outstanding 439,968 496,025 905,367 789,621
Bonds 30,784 175,469 183 551 180,993
Other interest bearing liabilities 61,494 31,102 63 933 114,417
Financial leasing liabilities 24,227 6,603 3 975 4,422
Total 556,473 709,199 1,156,826 1,089,453
total short term liabilities 217,784 316,853 699,568 681,313
total long term liabilities 338,689 392,346 457,258 408,140
The repayment obligations of the Group’s bank loans outstanding as at 31 December 2006 divide
between future periods as follows:
(EEK, ´000)
Within one
year 1-5 years
over 5
years
Total
Bank loans 699,568 270,075 187,183 1,156,826
The Group uses operating cash flows and borrowings to finance its operations. Major part of the
borrowings throughout the last three financial years relates to acquisition of investment property and
investments to real estate development projects. Acquisition of investment property is done via setting
up a separate business entity or through acquisition of already existing entities owning the property.
Due to specific group structure of separate companies owning the development properties, the loans
taken to finance either property acquisitions or real estate development are taken in most cases by the
relevant subsidiary or joint venture company. Some of the real estate development projects have been
financed through bond issues on the parent company level. Such proceeds have been given out as a
loans to subsidiary or joint venture companies.
As at 31 March 2007 the Group had a total of EEK 1,082 million of interest-bearing obligations
outstanding, EEK 82.3 million less than at 31 December 2006. The short term obligations accounted
for 62.5 per cent of the total balance outstanding representing an increase of 2.1 per cent compared to
31 December 2006.
The general financing structure of the Group remained relative stable during the first three months on
2007. Compared to 31 December 2006, the Group’s bank loans balance (including overdrafts) had
decreased by EEK 115 million. Large part of the decrease is attributable to the sale of 50 per cent of
the shares in Arco HCE OÜ, which resulted in a reclassification of a long term bank loan to other short
term loans. Also, the overdraft balances decreased by EEK 15.6 million in the first quarter of 2007,
reaching EEK 2.9 million. Furthermore, the Group completed two bond issues in the first three months
of 2007 which enabled the Group to decrease its short term bond obligation balance by EEK 30.5
million. The total balance of the bonds as of 31 March 2007 was EEK 181.0 million, a decrease of
EEK 2.5 million compared to the year-end balance of 31 December 2006. There were no significant
changes in financial lease liabilities during the three-month period ended 31 March 2007.
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