Estonia, Markets and Companies, Retail

Tallinna Kaubamaja Grupp will also establish three new subsidiaries, the retailer told the stock exchange.

In order to harmonise the management function and increase synergies, a plan has been put in place to integrate the activity of the group's supermarkets through a merger whereby ABC Supermarkets AS, which fully belongs to Selver AS, will be acquired by the latter.

Selver AS, a subsidiary of Tallinna Kaubamaja Grupp AS, is a chain of supermarkets and hypermarkets operating in Estonia that primarily sells food and staple goods. The Selver chain, which has been operating since 1995, consists of 54 stores, of which 22 are located in different districts of Tallinn, and an e-store with the largest servicing area in Estonia.

As a result of the purchase of shares of ABC Supermarkets AS on May 29, 2020, the chain acquired sixteen Comarket stores in Harju County, Parnu County, and Tartu County, two Delice food stores in Viimsi and Parnu, and the Solaris Food Store.

After the merger has been entered into the commercial register, the 16 Comarket stores will be gradually brought under the Selver trademark by the end of 2020. The Solaris Food Store will continue to operate under the Solaris Food Store trademark and the two stores in Viimsi and Parnu doing business under the Delice trademark will retain the Delice trademark.

Kristi Lomp, current member of the management board, will continue as a member of the management board of Selver AS. Andrus Pold, a current member of the management board of ABC Supermarkets AS, will become the manager of Selver's small formats. The supervisory board will continue with Andres Jarving as chairman, and Juri Kao, Enn Kunila, and Raul Puusepp as members.

The strategic objective of the group is the continued development of the wholesale function along with retail trade and the expansion of the selection of imported trademarks.

The main field of activity of OU TKM Beauty, a subsidiary which is solely owned by Tallinna Kaubamaja Grupp AS, is the retail sale and wholesale of cosmetics products in two L’Occitane stores. OU TKM Beauty has a subsidiary, OU TKM Beauty Eesti, which is involved in the retail trade of cosmetics products in Estonia and manages the I.L.U. store chain of beauty products. Currently, three stores operate in Tallinn, one in Tartu, and one in Parnu.

In order to separate the operations of OU TKM Beauty Eesti, which is involved in the retail trade of cosmetics, from the cosmetics wholesale function, a division will be undertaken. In the course of the division of OU TKM Beauty, OU TKM Beauty Holding, a company with a share capital of 2,500 euros and 1000%ownership by Tallinna Kaubamaja Grupp AS, will be established.

OU TKM Beauty will transfer the share of OU TKM Beauty Eesti to OU TKM Beauty Holding. Anne-Liis Ostov, who currently manages the operations of I.L.U., will become a member of the management board of OU TKM Beauty Holding. The further plan is to merge OU TKM Beauty Holding and OU TKM Beauty Eesti so that OU TKM Beauty Eesti will directly become a 100% subsidiary of Tallinna Kaubamaja Grupp AS. Ostov does not hold any shares of Tallinna Kaubamaja Grupp AS.

Another division of subsidiaries will take place in the group with the aim of separating retail sale and wholesale functions of footwear, wherein TKM King AS will transfer part of its assets to TKM Hulgikaubandus OU, a company to be established in the course of the division. The objective of the activity of TKM Hulgikaubandus OU is the import of footwear and other industrial goods for the retail companies of Tallinna Kaubamaja Grupp.

Tallinna Kaubamaja Grupp AS will be the sole shareholder of TKM Hulgikaubandus OU and the share capital of the new company is 2,500 euros. Kristi Lomp, who will continue as a member of the management board of Selver AS as well, will be a member of the management board of TKM Hulgikaubandus OU and she does not hold any shares of Tallinna Kaubamaja Grupp AS.

Tallinna Kaubamaja Grupp aims to provide its customers more convenient purchases and has therefore decided to develop financial services that support its retail business. The group is applying for an authorisation of a creditor to develop the financial service line of business and is establishing TKM Finants AS, a subsidiary with a share capital of 50,000 euros belonging completely to the group.

According to the developed plan, after the Financial Supervision Authority has issued the relevant authorisation, TKM Finants AS will commence with granting credit to private persons, the postponement of a due date for a charge, including the entry into credit agreements and performance of acts needed for this purpose in its own name and on its own account.

Member of the management board of TKM Finants AS will be Marit Vooremae, who has been working as the financial director of Tallinna Kaubamaja Grupp AS since 2008 and who will continue in this position after the establishment of TKM Finants AS. Vooremae does not hold any shares of Tallinna Kaubamaja Grupp AS.

The establishment of subsidiaries and reorganisation of the group's structure will have no effect on the consolidated financial results of the group.

Establishment of subsidiaries is not deemed to be qualifying acquisition of a holding for the purposes of the part "Requirements for issuers"nof the Rules and Regulations of the Nasdaq OMX Tallinn Stock Exchange and it will not significantly impact the activity of Tallinna Kaubamaja Grupp AS.

The members of the management board and the supervisory board of Tallinna Kaubamaja Grupp AS have no other personal interests in these transactions.