Services and Technical Suppor

RNS Number : 0803C

Equest Investments Balkans Ltd

06 November 2009

 



6 November 2009

Equest Investments Balkans Limited 
("EIB" or the "Company")

Termination of Services and Technical Support Agreement 
and Resignation of a Director

The Board of EIB announces that the Company and Equest Capital Limited ("ECL") on 5 November 2009 agreed to terminate with immediate effect the Services Agreement and Technical Support Agreement entered into in May and June 2008 (the "Agreements") (as described in the Circular to Shareholders dated 28 March 2008) (the "Circular").

Under the Agreements, ECL provided the executive management, technical support and other services to EIB after the Company was changed into a Balkan focused investment holding company.

The challenging economic environment over the past year or so and the consequent change in the Company's strategy to focus on its core holdings in TechnomarketDomo ("TMD") and in Borovets, has resulted in the Board of EIB redirecting its immediate attention to the management of TMD and the continuing disposal of its non-core assets. This shift in strategy has simultaneously accelerated the need to further internalise EIB's management, and the termination of the Agreements is a part of this process.  

As part of the termination arrangements with ECL, the Company has agreed to settle the various amounts due to ECL under the terms of the Agreements for the provision of services up to 31 October 2009.  These sums due to ECL will be paid by way of an immediate part payment and the balance by reference to an agreed schedule related to the receipt by EIB of certain proceeds from the sale of the Serdika property as well as to the satisfactory settlement by ECL of certain exposures of Immofinance, an EIB subsidiary.  Except in respect to the orderly handover arrangements referred to below, no further payment will be made to ECL in respect of the Agreements.  

Also, under the terms of the termination of the Agreements, the Long Term Incentive Plan ("LTIP") has been terminated. No payments have or will be made under the LTIP in respect of the current financial year ending 31 December 2009 or in respect of future years.  Further, the Company has agreed to waive the lockup arrangements relating to shares issued to the ECL partners, as described in the Circular. The Warrants issued under the Warrant Instrument dated 17 June 2008 (as amended), in so far as they are still subsisting, are unaffected by the termination of the Agreements.  

In addition, under the termination arrangements, Kari Haataja has today resigned from the Board of the Company and the Company has also agreed to change its name within the coming three months thereby enabling the use of the "Equest" brand to cease.  

The ECL principals continue as shareholders in EIB and remain supportive of EIB's strategic development.

As to the future arrangements for managing EIB and its subsidiaries and affiliates, these will now be centred on Sofia from where its Chief Operating Officer, Tero Halmari, will report to the Board.  Mr Halmari will also serve as current interim Chief Financial Officer for TMD.  It has also been agreed that ECL will provide some handover support to the Company in respect of certain accounting functions. 

TMD management has also been restructured to include Ian Schmiegelow as Executive Chairman and Roger de Bazelaire, former interim Chief Financial Officer of EIB, as a Non-executive Director of TMD and Chairman of its Audit Committee.  Nikolai Kitov has been appointed Chief Operating Officer and Lorand Szarvadi Chief Development Officer of TMD.  Further, TMD is well advanced with the proposed external appointment of a permanent Chief Financial Officer and an Internal Auditor.

Commenting, Ian Schmiegelow, Chairman of the Board of Directors of EIB, said:

"The termination of the Agreements represents a logical step in the Company's strategy to refocus its resources on the management and operations of TMD, the investment in Borovets and the disposal programme of non-core investments.  The Board is confident that the restructuring of the group's management better suits EIB to meet current challenges as well as to reposition itself, and most particularly TMD, to take advantage of future opportunities for growth. 

"I would also like to thank all the ECL team for their contribution to the establishment, development and management of the EIB business and to wish those not transferring to EIB well for the future."

-Ends-

Enquiries:

Equest Investments Balkans Limited	Ian Schmiegelow (Chairman)	Tel: + 44 20 7630 3350
Financial Dynamics	Ed Gascoigne-Pees Nick Henderson	Tel: + 44 20 7269 7132
Collins Stewart Europe Limited (Nomad)	Hugh Field	Tel: [phone]
KBC Peel Hunt Limited  (Broker)	Capel Irwin	Tel: + 44 20 7418 8900

 

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