On 12 May 2026, Arco Vara AS completed the disposal of a 25% stake in the Bulgarian company Botanica Lozen EOOD to Kamaleo Invest OOD. Arco Vara AS published a stock exchange announcement regarding the transaction on 13 March 2026 in connection with entering into an agreement for the partial sale of its Bulgarian subsidiary (Arco Vara AS Signs Share Purchase Agreement for Partial Sale of Bulgarian Subsidiary).
Simultaneously with the completion of the transaction, the parties entered into a shareholders' agreement and a project management agreement, pursuant to which Kamaleo Invest OOD will manage the residential development project of Botanica Lozen EOOD. The local partner's responsibilities include organising the activities necessary for the implementation of the project, including coordination of design and construction activities, permitting procedures, procurement processes and management of the sales process.
The amounts payable to Kamaleo Invest OOD depend on the proper completion of the project stages. If all project stages are completed in accordance with the agreed timeline and conditions, Kamaleo Invest OOD shall be entitled to receive service fees of up to EUR 576 thousand in total and up to 40% of the project profit. The profit share will be determined based on the net cash flow generated after the completion of each project stage, taking into account, among other things, tax liabilities, working capital requirements, capital expenditures, cash flow requirements and debt obligations. The parties aim to complete the entire Botanica Lozen EOOD development project by July 2029 at the latest.
Following the transaction, the issuer retains control over Botanica Lozen EOOD and will continue to consolidate the company in its consolidated financial statements in accordance with IFRS standards.
The transaction does not have a material impact on the issuer's consolidated income statement or the volume of consolidated assets and liabilities. As a result of the transaction, the share of non-controlling interests in consolidated equity will increase by approximately EUR 2.2 million. The transaction price exceeds the carrying amount of the disposed interest by approximately EUR 25 thousand, which will be recognised directly in equity in accordance with IFRS standards.
Botanica Lozen is Arco Vara's residential development project located near Sofia, the capital of Bulgaria, under which family homes will be developed in three stages. Homes in the first stage of the development have been completed and sold. Preparations for the second stage are ongoing, and construction is planned to commence in the summer of 2026.
As Kamaleo Invest OOD holds a qualifying holding in Botanica Lozen EOOD, a significant subsidiary of Arco Vara AS, the transaction constitutes a related party transaction. The transaction does not qualify as a significant transaction within the meaning of the "Requirements for Issuers" rules and regulations of Nasdaq Tallinn Stock Exchange.
Darja Bolshakova
CFO
Arco Vara AS
darja.bolshakova@arcovara.com
