Kalev                             ANNOUNCEMENT                          17.03.2005



Addition to subsidiary's share capital



AS Kalev, the sole shareholder of AS Kalev Real Estate  Company  (AS  Kalev  REC),

has resolved to make a non-monetary contribution to increase the share capital  of

AS Kalev REC by 74,419,000 kroons. The share capital  of  the  company  will  thus

amount to 115,319,000 kroons.



The share capital is to be increased by issuing 74,419 new registered shares  with

a nominal value of 1,000 kroons. The shares will grant all the rights  granted  by

other shares, including the right to receive dividends this financial year.



AS Kalev will acquire all 74,419 of the new shares.



With the transaction, AS Kalev's claim against AS  Kalev  REC  in  the  amount  of

60,419,025 shall be offset in the  amount  60,419,000  kroons,  whereas  AS  Kalev

REC's debt to AS Kalev in the amount of  14,000,000  kroons  shall  be  deemed  as

paid.





Ruth Roht

PR manager

+372 6 077 858