NMT claims Romania loan breakthrough

The Board of Directors of New Marathon Tours (NMT) announced the agreement that its subsidiary, ONT CARPATI has signed with GHES (owner of luxury 5-star hotel Grand Marriot in Bucharest) and the major shareholder of GHES, STRABAG.

The agreement concerns the payment of a loan of EUR 26 mln, which has been granted by ONT CARPATI to GHES. The agreement was reached after the referral of the case to the International Court of Switzerland. Its main provisions are the following:

A) The loan will be paid in a period of 15 years, starting from 2006 with the payment of the sum on a three-month or six-month basis and based on the results of GHES. The loan will bear an annual interest of 5%. According to the financial forecasts of GHES for the next 15 years, the company is expected to pay our subsidiary, ONT CARPATI, as follows: a) EUR 1,500,000 the first year, b) an average EUR 3,000,000 for the next six years and an average of EUR 2.500,000 for the remaining eight years.

B) The Board of Directors of GHES is composed of five members (2 of ONT CARPATI, 2 of STRABAG and 1 of Grand Marriot). The Chairmanship and Vice-Chairmanship of the Board of Directors will be exercised based on the rotation process every six months. It is noted that 30% of the share capital of GHES belongs to ONT CARPATI.

C) In order to be effective, the agreement provided for the revision of the main borrowing that GHES has with a Consortium of Austrian Banks (ERSTE BANK only), so that it ensures that GHES pays its obligations to our subsidiary every year.

Recently, GHES signed a final agreement with ERSTE Bank for the revision of its main borrowing and the enforcement of the revised borrowing will be effective from April 1, 2006.

– The most important impacts of the above agreement are:

1. The Group will secure a stable cash flow, which serves NMT obligations.

2. It allows a further growth of NMT activities in Romania.

3. The Consolidated Cash Flow Account will be strengthened significantly.