PENNU COMPUTER TECHNOLOGY GROUP

ANNOUNCEMENT

16.11.98

 

ABOUT THE MERGER PROPOSAL

 

As an answer to the BNS news about the merger proposal of Pennu to Microlink, I 

can personally explain the following.

Due to the smallness of Estonia and limits on the economy, many local companies need

to concentrate in order to expand its activities more effectively on the foreign

markets. The development of the local market has exhausted, and in a longer 

perspective, the Estonian companies need more effective export politics.

Thus, it is very normal for the local companies to seek the merger 

possibilities in order to work more effectively and develop exports.

Therefore, at the end of September, I made a proposal to Microlink 

to investigate the opportunities for cooperation.

 

The financial data of Pennu is accessible to everyone via Tallinn Stock Exchange, 

and therefore also Microlink was aware of them. We cannot say the same about 

Microlink's financial data. During the course of negotiations we became aware that

Microlink's debt equity ratio was more than two times higher, and the amount of 

owners' equity was more than two times lower than these of Pennu. 

Changing precise data was very painful to the other side. At this point, 

the negotiations ended.

 

At this moment, Pennu has found cooperation possibilities with Hansapank

in order to administer the PCT Liising portfolio, and the company's owners'

equity is sufficient for the company's development.

 

 

Alo Koop

+372 6 505 402