In order to finance the remaining settlement of the acquisition of Norgani Hotels to EQT/Scandic and other financial investors and to strengthen the Company's balance sheet to capitalize on the strong development in the underlying office markets in Norway and hotel markets in the Nordic region, the Board of directors has proposed to call for an extraordinary general meeting to be held on 17 June 2008 to resolve a share capital increase, in the form of a Rights Issue, in the amount of NOK 2,500 million.

 

Approx 2/3 of the share issue will be used to finance the settlement of the EQT/Scandic obligation and take out of other financial investors in Oslo Properties AS, while the remainder will be used to strengthen the balance sheet. After the share issue and following settlement of EQT/Scandic and other financial investors, the company will have an LTV of approximately 70% (as compared to a  LTV at the end of first quarter of 80% including the obligation to take out minorities in Oslo Properties AS).

 

The proposed share capital increase will be conducted as a rights issue with pre-emptive rights for existing shareholders in Norwegian Property ("NPRO") as per 18 June 2008 ("Rights Issue"). The shares are expected to be traded ex subscription rights as from on or about 19 June 2008. Tradable subscription rights will be distributed to existing shareholders shortly after the extraordinary general meeting, which is expected to be held on or about 17 June 2008. The price per share in the Rights Issue has been proposed to NOK 26.00, which reflects a discount of approx. 26% from the closing price  on Thursday 29 May 2008. The rights issue will increase the number of shares in NPRO by approx 96.2m to approximately 201.7m shares.The company is proposing a rights issue in order to avoid unnecessary dilution of existing shareholders.

 

The proposed share capital increase has been fully underwritten by a consortium consisting of existing shareholders and new investors. Each underwriter has undertaken, pro rata to his share of the underwritten amount, to subscribe for those shares not validly subscribed for within the subscription period of the proposed share capital increase. The underwriting consortium was oversubscribed by around 40%, and the major group of subscribers were existing shareholders. The following primary insiders and related parties are participating in the underwriting consortium: Widar Salbuvik and associated companies, Chairman of the Board, Awilhelmsen  and Torstein Tvenge and associated companies, Member of the Board.

 

The underwriters in the guarantee consortium that are existing shareholders have authorized the chairman of the board to vote in favor for the share capital increase at the Company's extraordinary general meeting. If the share capital increase has not been approved by the Company's extraordinary general meeting within 30 June 2008, the underwriting agreements will automatically lapse.

 

The guarantee consortium was put into place by Pareto Securities AS and SEB Enskilda AS.

 

The Company will prepare a prospectus for the Rights Offering which is subject to approval from Oslo Børs ASA. It is expected that such prospectus will be approved on or about 25 June 2008.

 

The call for the extraordinary general meeting is expected to be distributed on 3 June 2008.

 

For further information, contact

Petter Jansen, CEO, Norwegian Property ASA,Tel: +47 900 98 7 28

Widar Salbuvik, Chairman of the Board, Norwegian Property ASA, Tel: +47 901 80 060

 

This information is subject of the disclosure requirements acc. to §5-12 vphl (Norwegian Securities Trading Act)