AS MERKO EHITUS                      ANNOUNCEMENT                    08.07.2005  



Disposal of participation 



OÜ Merko Kaevandused was established in 2003 and its main branch of business

is land-mining. Regardless of years of prepatory work, the company has not yet

succeeded in commencing actual land-mining works. Due to the large-scale

investments required by oil-shale mining as well as the aim of increasing its

real estate investments, AS Merko Ehitus sold its 100 per cent participation

in the subsidiary OÜ Merko Kaevandused to AS Merko Grupp on July 8 in 2005.

According to the rules of Tallinn Stock Exchange, the said contract of sale

is to be considered as an transaction with persons connected with issuer.



Due to the disposal AS Merko Ehitus receives an extraordinary profit of 5,1

million kroons (294 thousand euros) in 2005.



Alar Lagus

Member of the Board

+372 6 805 109