The Rocca al Mare Arena or Saku Arena as it is more commonly called, the venue of the 2002 Eurovision song contest in Tallinn, is close to bankruptcy and needs 9.8 mln euros from shareholders to restructure its debts, LETA/Postimees Online reports.
Estonia’s biggest indoors arena, that has witnessed many big music, entertainment and sports events, made a loss of 2.97 million kroons in 2012 as creditors decided to add punitive fees of loan contracts to the debt claim. The company's undistributed losses reach over 9 mln euros.
The board of the company hasn't yet submitted a bankruptcy application. The company's annual report auditor Artur Suits stated that the company is insolvent.
Rocca al Mare Arena CEO Tarmo Hõbe explained that the arena manages well with everyday operations and their calendar is full of events till March next year but the construction loans of the arena had been taken based on an unrealistic business plan and thus cannot be serviced. "If the slate was cleaned and we would not have to carry with us that loss, we would manage nicely," he said.
Thus the company wants to hold a share issue to owners that would increase the share capital nominally by 2.3 mln euros, with 7.5 mln euros of premium par. The arena was completed in 2001 and belongs to the city of Tallinn (15.8%), OÜ Pivotal (68.6%) and the Estonian state (15.5%). The shareholders general meeting takes place on October 23.