PRO KAPITAL GRUPP

ANNOUNCEMENT



ACQUISITION OF A COMPANY



In accordance with AS Pro Kapital Grupp Supervisory Board 

decision of April 18, 2001, regarding applying the proceeds 

from eurobond issue, AS Pro Kapital Eesti, subsidiary of

AS Pro Kapital Grupp, acquired 100% holding in AS Kalaranna 

shares. Shares were bought through investment company Baltic

Investments Ltd from persons associated with Ernesto Preatoni.



The price of the transaction amounted to EEK 142,000,000

(one hundred and forty two million). AS Kalaranna is the owner 

of 60,000m2 premises located near Tallinna Linnahall and the 

Tallinn Old Town. Pro Kapital has planned to develop a dwelling 

area on the premises. Drawing of a detailed construction plan

has already begun.



From 1998 to 2000 AS Kalaranna has had no turnover due to no 

significant economic activities during last three years. However, 

at the same time the company has been in loss and had asset 

management related expenses. Loss for 1998 amounted to 

EEK 1,672,057, loss for 1999 totaled EEK 1,256,170 and loss for 

2000 was EEK 1,034,179. AS Kalaranna balance sheet and income 

statement for 1999 and 2000 will be published via the Tallinn 

Stock Exchange information system.



A non-interest bearing loan for indefinite term given to 

AS Kalaranna by Pro Kapital Eesti AS has a balance of EEK 7,745,000 

as at 17.05.2001. The loan was part of the transaction price of 

EEK 142 million, i.e. price for shares in AS Kalaranna was reduced 

by the amount equal to balance of the loan.



Kalaranna AS and Pro Kapital Eesti AS have signed a contract for 

rendering managerial services at the total cost of EEK 80,000 

a year.



Supervisory Board members of AS Kalaranna are Ilona Saari, 

Ernesto Achille Preatoni and Aivar Pihlak. Manager of the company 

is Andrus Laurits.



The above transaction shall be considered as transaction 

with related parties, as determined by the Rules and 

Regulations of the Tallinn Stock Exchange. However, the

transaction has no significance as the value of 

the transaction accounts for less than 30% of AS Pro 

Kapital Grupp latest audited consolidated owners equity.





Ilona Saari

PK Grupp, Board member

+372 614 4924