Signing the sales-purchase agreement of Jonathan project, negotiations on Terminal No. 11 project and changes in Latvian subsidiaries' management boards.


Signing the sales-purchase agreement of Jonathan project

On March 28, 2008 SIA Quality Nami which is a Latvian company belonging to Q
Vara Group, signed a sales-purchase agreement with SIA Jonathan on selling the
property (28 443 sqm) at Maskavas street in Riga together with a development
project. SIA Jonathan represents dutch real estate investors. The agreed
transaction price is 11 950 000 EUR. 

The transaction is subject to two assumptions - positive expert opinion will be
received about the technical project and a legal argument on the detail plan
ends positively (hereinafter the „Assumptions“). The mentioned argument was
initiated by Latvian Saeima members who filed a petition on Riga City
Government to  Latvian Court of Constitution for issuing a detail plan for
Maskavas street 264 property. The case is being argued between third parties
and no Q Vara Group companies are involved. Quality Nami has followed Latvian
legislation when applying for the detail plan and has received all necessary
approvals. According to the information known by today and the preliminary
opinion from lawyers Q Vara's management estimates the case to close in about
six months and after a positive decision the property sales transaction can be
finalized. 

SIA Quality Nami will receive the sales proceeds in three tranches. The first
payment of 9 000 000 EUR will be made in five days after the Assumptions are
fulfilled. The second payment of 1 950 000 EUR will be received in two months
after the Assumptions are fulfilled. The third payment of 1 000 000 EUR will be
received five days after the project's construction permit is handed over to
the buyer. 

Due to the IFRS standards and the fact that the sales transaction was signed
before Q Vara Group finalized the 2007 annual report the transaction's value
must be recorded also in the annual report of 2007. This causes the net loss of
2007 to increase compared to the loss stated in the 12 month report presented
in March. Still the transaction improves Q Vara's liquidity considerably and
strengthens the company's balance sheet. 

Negotiations on Terminal No. 11 project

According to the Letter of Intent between Q Vara and HIH Global Invest GmbH
that was disclosed in Q Vara's releases on March 5, 2008 and March 25, 2008 the
parties agreed to reach a final transaction for raising capital into Terminal
No. 11 project by April 7, 2008. By today it is known that the signing of the
transaction will be delayed by up to two weeks. Up to now the investors have
finalized the project's legal and technical due diligence and during the
following two weeks the final shareholders' agreement negotiations will take
place. 

Changes in Latvian subsidiaries' management boards

According to SIA Q Estate's and SIA Zebru's shareholders' decision Sarmite
Sazoncika was called back from both companies' management boards. Alo Lillepea
was named as a new member of the management board in both companies. 
 

Additional information:
Meelis Šokman
Chairman of the management board
Q Vara AS
Phone: 668 1600