Baltic Horizon Fund ($NHCBHFFT)

Today, we're together for a meeting for Baltic Horizon Annual General Meeting on this lovely Thursday of summer. We have several investors in attendance as well as Baltic rise and teaming attendants. We have the Chairman of the Supervisory Board and Thomas InSite, me and the fund manager sake -- then the management Board member JerdiVina, and our team, Janarimowa and Inrein. Let's begin the Annual General Meeting and SP1 We will have 5 items on our agenda today. Firstly, we will cover the audited not horizon for the financial year 2025. And then we will also overview the plans and the strategy for the remaining part of the year. And we will have 3 voting today, 1 of the meeting while Jan will be the Secretary of the meeting. We will have putting power to reach decisions today.

To define into context, the figures have been published on the website. You have all had a possibility to study the report. Also a very eventful year for us we joined the turnaround of Baltic Horizon Fund in full. We is a private main company under a name Greenest which has invested into the fund in first time in 2024. At the time when the fund was raising private placement funds to support its liquidity needs, we invested them. And really soon, we realized it's a much more complicated, much more demanding, undertaking than just being a passivate after that step. So I would like to share here with you, fellow unitholders and also from now my chair as the Supervisory Board Chairman of Management Company. How did we -- where did we find the fund at the beginning of 2025. How did we see it with the assessment of the situation and the steps we have taken in particular during the first quarter of this year and server strengthening of the capital of the fund. So we invested in the autumn of 2024 at the invitation of the management team back then under the assumption that the fund needs a certain amount of capital to successfully bridge its interim need for cash and turn in stretch portions around, meaning that the properties will acquire more tenants and money will be used to accommodate these incoming talents we're fitting out the premises, et cetera. However, we realized that the money which was raised in the autumn of 2024 was for the funds to continue running solidly cost, the fund was over indebted, has too much debt from basically from before the cabin. And that problem has dragged on the fund for the last 5 years, the volume of debt was impossible to service just to pay interest and repayment of the loan amortizations. And another problem has been that once you have loans which you cannot service or those loans are in breach of financing covenants, those loans could be called by the creditors and once on the other ones obtain the same right also known as cross-default across different loan instruments, including the bonds, which are held by the fund itself. And that, in combination with continuously negative cash flow. So fund was always spending more money or collecting less money than it has to pay to service debt and service properties. We realize that the fund is running out of money, if nothing is done in a year or so the fund is running out of money, literally, and the creditors will obviously take their own prices or to the loan agreement. That was a scary reckoning. And 2 figures, which are shown here in the black, the consolidated debt service coverage ratio for the entire fund for 2024, 0.78, which means that the fund was only collecting 78% of cash flow to service its that. So it was burning money at a very great velocity. And another figure, 62% of loan-to-value, meaning the value of loans compared to the valuation of the investment properties held by the fund was also at a very steep level in combination with the property values, which were very difficult to achieve in any disposal attempts, which were undertaken by the previous management. So this wasn't obviously a overleveraged situation. Furthermore, the portfolio of properties the fund owns have been beaten by different factors over the last 5 years. So the performance has been deteriorating. And reletting has been taking place at lower rents than the expiring lease contracts required given that situation management was trying to sell whatever is sellable and those were difficult projects, some of them materialized, but they were becoming more and more desperate as it was becoming on the fund would run out of money. So before we entered into more close cooperation with the management. We first started looking around now that we have invested quite a significant amount of money. Who are the other big investors who have been invested for a long period of time and what do they think about this fund, what can we agree to do together as the capital providers for the fund in order to turn our fortunes around. Started approaching these different investors, and we pretty much over the first call realized there has not been a single leading investor who has -- who would have been a supporting investor motivated and invested here consciously. So that was a big receding where we found out, basically, we are -- not to say that all of you who have invested into the fund are not there, but there has not been any other large investor who would have said, yes, we want to join the the governance structure of the Fund Supervisory Board, and we have an idea of how this should be handled so at the fortunate around. That's when we realized that we have to get involved in a much closer supervision of the management. And we appointed in 2025, we appointed a new composition of the Supervisory Board of the fund, which is a different body from the Supervisory Board of the management company of which I'm the Chairman now -- and I'll say a few words about what was the role of this this step on the next slide. But basically, the area of recording when we ask invest as the investor started in 2024, we realized we have to take an active role because there's no other investor and this management without the support any management how the support of investors cannot turn the fund around. It will be a very dire situation for everyone at . So the first step we've taken, we've appointed the Supervisory Board members in the fund. I was 1 of them. There were to other members, independent in a sense, not owning any units, professional Chairman appointed by us. And it has been a very intensive period Arm's former manager me. We witnessed that we work throughout the summer of '25 since May to October, the beginning of November when we could invest acquired the management company. There were at least 7 formal Supervisory Board meetings taking place and basically focusing on the true crisis management. So going through the budgets together, cutting all nonessential costs, reviewing complicated most urgent property matters and then we -- with the recognition that without new capital, this fund cannot continue. We also declared to the former owners of the management company that for us to lead a new ization of this fund, we have to have control of the management in a sense that we would also own a management company. It has taken a a few months to come to an agreement on the terms of this further commitment of ours. And by by November last year, we acquired the management company, it was implemented in the first quarter of 2026. Coming up with the idea of how this new capital should be raised was not easy because the air treatment to all existing unitholders without allowing external new capital to squeeze everybody out or those who are not participating out. At the same time, it was obvious that if we are not investing into this new recapitalization, it will be very difficult for us to acquire trust of anybody else. So we had to take part ourselves as the largest unitholder and now as the owners of the management company. And therefore, we -- after many consultations, we have different advertisers, lawyers, some of the other bigger unitholders will be offered something which is very similar to an instrument called rights offering, so all those who were the unitholders at the time of the raising, they're offered a proportional share in the new capital if they wanted to. And we have undertaken to take our partner it, which we did. We are glad to see that what many other unitholders have taken part, including some of the bigger ones. And that recapitalization and necessary step for the company to complete its with auditors allowing this to be a going concern, a company which is solvent and as a proven business plan to continue going forward. So I wanted to give this overview before this year, 2025 was a year of steps in hopefully stabilizing the capital structure of the fund. [indiscernible], if you could please take over and walk us through the figures.

I would like to present on the financial statements of 12,000 into. Those we are audited by our long-term partner, keeping us an -- the income statement, as you can see, total revenues for the 2025 was around EUR 20 million. It was at a similar level as it was last year. But note that in 2025, there was also Mark, 1 of our assets, which was sold in the mid of March. So it also includes 2 months of a -- our property costs increased -- slightly increased to EUR 81 million, and it also includes allowances for bad debt. As you can know the amount is significantly higher compared to the last year. It was like EUR 500,000. And Irene, I want to stricter financial policy that we came to this management in relation to the change of the management work. This is 1 of our clear part, I would say, to help more strict view on all guidance -- according here, okay was almost at a similar in EUR 11 million, EUR 700,000. -- getting to overhead, those are slightly decreased due to 2 main reasons. One of them was lower management fees in relation to lower net asset value of the bank. But also, you can notice that our administrative expenses we are reduce doing that. I get [indiscernible], I would say, we are all the costs that we have in the ondanSPD level just to reduce anything, what is really necessary. So EBITDA was EUR 917 million, slightly better result than it was last year. Back in November 2025, we have our independent property valuation performed by new seg, the loss was a significant one. It was almost EUR 21 billion. I can add me that it is still challenging still to receive the prices, which were quoted in our property relations on the assets which we have for sale. The custom is real working on that, but maybe I must will comment more about that. Talking about financial side, our interest expenses makes a release income statement and net cash flows as we have that and we know all about we all knew about it. And it carries a really high margin, 8% plus or more than is that also this is 1 of our clearest also be audited to get rid of that as soon as we can. Talking about metrics, it is really glad that now we reached at the end of the year, we reached this year, which is above 1. What means that the fund is starting to cover its debt obligations, but we are committed to strengthened further. And as well, we can see that our debt-to-EBITDA ratio is still really high for the, I would say, market practice, it should not be more than 8, 9, but we are still getting there. And average cost of capital was slightly due to changes in Eurobond as well as the prepayment of of the bonds when we sold the Marc. Getting to the financial standing balance sheet, our investment properties was EUR 29 million. So it is a huge detection due to 2 main reasons. It was the same formation as well as the sale of Marcum. As you can see on current asset side, we have cash on account split that into 2 categories because we see that this kind of split approach is a better way for investors to see the liquidity of the plan. Restricted cash means that cash which is on an SPV level in the each of the company, but only that company can use this money or the patient CapEx or debt services. around EUR 1.4 million at year-end once the money fund can use real to pay bond interest to pay its expenses. Grid and other receivables were also significantly reduced due to the same 2 reasons. It was due to backup provisions, but also as well as we started to aggressively approach our genes for does not being started to monitor a lot all of the debt. Talking about the equity side, debts in capital remain the same during the year as there was no capital strengthening, but it was a huge loss during the year, mostly due to the valuation. So we ended up with EUR 78 million on the equity side. And clones on the long down side, you can see EUR 7 million. Although we have more -- there was additional EUR 20 million, which are on the short-term side because some loans bridge the covenants, we already covered it during Q1, and we solved those issues. So it is already long-term loans. So it was above EUR 20 million. And at the year-end, there was only 2 loans, which we are expiring. It was minor but it was conditional loan prolongation because the creditor SEB asked for at least EUR 7.5 million of capital strengthening. So when the capital was raised, we managed to prolong it in Q. Our ones as well was like short-term liability because as you know, our equity ratio due to proper valuation loss was 36.1%. It was a really huge bridge and due to the active management and work, it was the capital was range also to fix this covenant bridge to our total liabilities this year decreased mostly due to reasons that Mark was sold and Colin total liability side that Meraki was sold and all the sales proceeds was to use for our liabilities -- to cover other liabilities. So we ended 2025 in the start of transition, and we entered 2026 with new priorities like reduce interest expenses, reduced administrative costs and to improve our performance of other assets. Some of the progress can already be seen in Q1 results and then we must still maybe explain a.

Thank you, Carla. Thank you, Thomas. Indeed, 2025 was the legacy year where we still have a major burden of the bond. But hopefully, 2026 can become the year of turning point. and we already see some transformative actions and results. So firstly, at the beginning of the 2026 in Q1, we made a lot of adjustments to our property management teams, which actually helped us to the recoverability of cost from our tenants. So without major increases in the compared to the same period last year, we managed to achieve 4% higher service charge collection rate, which is already showing some operational efficiency as well as reduce our cost basis for the assets. I'll talk about that a bit further. But basically, we managed to to reduce the cost by a significant amount. And I think we will see the full magnitude of the changes throughout the entire year of 2026. So still NOI remains roughly the same, but compared to the previous year, but in the last year, we still had Maracas. So this is -- we are a bit higher level even without 1 asset as well as this is finally the first time in many quarters where the fund has reached profitability and compared to, for example, previous year's first quarter, where we had a loss, we've managed to turn the time around and have a completely different outlook on the results. And if we also consider the one-off costs which we had related to the capital raising to the bond repayments, the fund would then be at around EUR 500,000 of profits for Q1. So we are definitely seeing a bit of positive trajectory, but still it's just first steps. And as mentioned by Gerda, we are closely monitoring all bonds and financial metrics. So as you can see, the CR slowly turning to 1.1, and we have the goal by the end of the year to reach 1.2%, which is also mentioned in our bond rules. So we are moving closer to that figure and having at least a bit of headroom to cover the debt. In terms of our financial standing, as you all know, we've raised around EUR 12 million during the last capital raising almost 50% of all pro rata units that would have been raised. So we do consider this good result. And it gives us the capital to work with the assets as well as part of the capital immediately went to repayment of the bonds to again, deleverage the fund. So this was the key balance sheet changed during the first quarter. In terms of investments, we made some small investments into the properties to enhance the properties and achieve leasing results and generally the NAV at the end of Q1 already reflects the full impact of the capital raising. As well as I think it's important to note that we've made material steps towards kind of reducing the stress on the bank loans. As Gale mentioned, many loans are now out of the bridge and all of them are not in any covenant reaches, but -- so we managed to prolong them. And now we only have Pittas the only asset who has a loan expiring in the next 12 months. And on the prospects of PBITA, I'll comment a bit later. So mostly, at least for now, the immediate crisis is managed, and we can work towards the our turnaround objectives. And as the management as well as with support from the Supervisory Board, we managed to conclude that there are 3 turnaround objectives which we must achieve prior to anything. First is we must ensure that the fund becomes profitable and cash flow positive again, even though we see that there is a net profitability for the first quarter, there are still CapEx works and that we need to deploy. So we are still working heavily to have the actual cash flow being positive and to improve the results, we have deployed fully new property management teams, which is now fully in-sourced. In the past, we used external partners to handle the property management services and as well as the leasing side. But now the entire team is hired into the fund and providing services just specifically to the fund exclusively. So the motivational side is 1 directional towards the same common goal, which is 1 of the key attributes for us in the turnaround objectives. And of course, as mentioned by Gerda and Antenas, we have very stringent control on the overheads and any property expenses, which is not kind of essential for the services and even the essential services are being tendered tend majority of the services towards cheaper contracts. As I mentioned, it will -- the result will be seen later this year as well as we've reduced the majority of overheads to have just a bare minimum of the cost that we need to run this fund and hopefully, in the future, we can also find additional waste to remove it and reduce it. And as a result of this, we are hoping that -- these -- all of these actions can also kind of allow us to work with the banks show a bit of more positive results and then hopefully remove and reduce the cost of borrowing as well. And the second point, the turnaround is our properties have to become competitive again. There have been times in the past where we have prolonged vacancies. So this is now fully being addressed by the deployed teams. And our general target, of course, is to have the net positive leasing. At the moment, we have around 85% occupancy. So definitely, our in through this year is to increase it, which then helps the cash flow and we are hoping that some of the rental conditions and the current contracts can be improved upon the prolongation of the lease agreement or just another side that we are working cost. So -- generally, we together the management more than together with the property teams, we underwent to a full review of our all leasing contracts all costs and have done a fund reduction plan, how we are going to decrease the cost and increase the leasing and rental agreements. And hopefully, we can also achieve a bit of efficiency through CapEx is also Montanas mentioned, they needed quite significant amount for CapEx works, but we're trying to really focus on what's crucial at the moment and only deploy such CapEx works. And then once we see that there is actual positive movement in the results then we can consider nonessential items as well. So these 2 points is mostly about engaging our teams and working a lot with the assets. And then we have the third objective, which is the sustainable capital structure. And this fund had the sustainable capital structure for quite many years now, let since, call it '19, and we are hoping to turn the tide. So we reiterate and clearly stated that our goal is to achieve below 50% of LTV and the debt, especially the bond as soon as possible and hopefully, in result, working more with the banks and achieving sustainable cost of debt, which at the moment, at least in my opinion, it's not sustainable, and we must reduce it further. So hopefully, we can achieve that. And as our top priority we declared many times, but I will reiterate that we have the goal of repaying back the entire bond as soon as possible, and we can do it realistically through disposals or further capital injections. But with the remaining part, I think there are concrete steps that we can take to reduce it as soon as possible. And of course, once we've done all the work of the bonds, improved the assets, we can then hopefully restart the top-tier vendors willingness to finance the long-term debt and reduce further our cost of debt. And our plans for 2026 general reflects the key goals. But there is very concrete decision that we have made inside the management company that, unfortunately, we continue or restart the distributions to investors until we reach the turnaround objectives as well as -- we will not be taking any decisions on further capital injections until we have solved the turnaround objectives. And I think at the moment, we are going through this transition phase looking at the realistic situation of the fund where we can get it within the next 12 months and then once we dealt with fundamental immediate objectives of leasing the properties and working with the assets, then we can look at the strategic options of the fund, what can be done with the assets. And what we can achieve is how -- what's the best outcome to return the funds to the investors, whether it's after stabilizing the portfolio return to distributions or are there any further sales that we should do on kind of return the funds to the investors through the disposals of guests. So in terms of the plans, we generally working tremendously on the leasing side. So leasing is the current price we have in the fund and throughout the past quarter and the beginning of this quarter, we have worked a lot on our Latin assets, where we signed a new anchor lease with a brands cash & carry in we needed this new tenant because our previous tenant, SkyBaldia in HypoCat assets, which was previous to Sky asset when bankrupt, they declared bankruptcy in March. And we immediately found a new anchor tenant who can kind of occupy the building and still provide the positive cash flow for it as well as we've been in the past several months, working closely with ALM, 1 of our largest tenants and the 1 who occupies the modest building to find a long-term solution. I think we found one. We signed an agreement with them, and they will hopefully be staying in the building until '24. So we're still working out the structure and how to best support them as a tenant, but we have managed to reach an agreement on the formal side of things. And hopefully, we have them for the long term as well as we've been working on many different partnerships. And 1 example I want to point out is event where we signed a lease agreement with them as well as a partnership agreement, which both helped us to lease the properties as well as achieve good partnership results through our property management side and kind of the cost side on the assets. So we are aiming to do more of these partnerships in the future, hopefully resulting in and further leasing activities. And the last item from the leasing side is we managed to sign the prolongation with my thickness and an expansion, they will be expanding in ostomy in 2027. So it's another way to secure tenants for the foreseeable future. And these activities truly in a sense, help us to stabilize the fund. They are prolonging the weighted average lease term of the fund, which now has gone from 3 years roughly at the start of 2025 to 4 years at the beginning of 2026 and now hopefully, given to a higher number of having a stable cash flow and less risk of this tenant changes in them moving away from the assets, which was the case throughout the past 5 years. Seeing there have been many cases in Lincoln or in Upmalas where a large tenant left the building creating immediate pressure for the assets. Now we're kind of getting a lot of new leases, which is in a modern sense and size have 500 to 1,000 square meters. So we have more diversification, and hopefully, higher gold. And as the other objective we have the costs. So our goal for this year is to have the run rate of overheads and per quarter, which is without the management fee. And this is a significant reduction from the previous overheads, which we had in the past. again reducing the stress on the fund and on the profitability. We are finishing with the onboarding of the property operators and this task is now mostly finished. But as I mentioned, we will still be undergoing some partner changes in the assets. So hopefully, during this year, we can have the full base where we have the full property management competence in-house and then the partners that hit us right and can help us achieve the goals, which we outlined. And of course, it's not 2026. If we're not using the eye, so we are deploying a lot of AI in our daily work. So we are looking how to enhance our our property performance but also bloom AI tools and especially in sales. We use a lot of them. So hopefully, this can result in the sales side as well. And the last one, on the item list, we have the disposal targets. We have been vocal about -- they need to dispose at least 1 or 2 additional asks. So we are going through with the plan and at the moment, the 3 key assets that we are considering for sale is Brita, Mokate Center, which is Exki, and Master in ore cases, we have suitable buyers at the moment and already engaged discussions. So probably throughout the next couple of quarters, we will see if the negotiation materializes as well, as you may know, we have declared in the past that we are not selling the assets below the book value. So all 3 sutures for all 3 of these assets are in the range of current book values. But as discussed and said by Gerd, there is definitely a bit of pressure and difficulties to actually achieve the sales at the current book values. But I think through kind of constructive talks and create solutions with the potential partners, we can achieve the book price for these particular assets. And of course, the main objective of selling these assets is to repay back the bond. So whatever free cash we will have from the disposals, we will use to further decrease the bond and I think this is a more appropriate way to reduce the bonds rather than trying to get additional capital from the investors and doing dilutions. This is mostly our goals for 2026, and we will definitely be communicating more about them in the future as we see the results of our actions. But now I want to focus more on the voting items of this general meeting and the first 1 being the proposal of the new Supervisory Board member prepares who has an extensive experience in the banking industry. He was the CEO of Swedbank Estonia and worked in the as -- in the group executive management team. So we are proposing it as a new Supervisory Board member from June 1. And we -- with this, we are trying to strengthen the Stankeviciene presence inside the fund and having an experienced professional as Mr. Britt can deliver additional value to the shareholders and to the entire management team through his support and his consultations on the management and best practices for the governance of the fund as well as they want to announce as of today, Ms. Mildered who was the previous Supervisory Board member has resigned from her position. So we would again have 3 Supervisory Board members of the fund. At the moment, we have the Chairman, Andres Maluku and then Professor Pergenster. So we -- today, we are hoping to achieve resolutions in line with the mentioned information. First is to elect Mr. Brett Barons to the Supervisory Board for 2 years from today, first of June 2026, approved renumeration of $11,000 per year for the new Supervisory Board member, Mr. Britt, which is in line with the current remuneration of the current supervisory board members. And then the third item is to extend the mandates of all current Supervisory Board members until first of June 2028. So aligning all of the mandates to the same term and having now a clear Supervisory Board in place. We are now beginning the voting. We have received the some power of attorneys prior to the meeting. As I mentioned, we have the quorum today, so we can pass decisions. And in the meantime, while we're voting, we can proceed with the Q&A section. We have not received any questions to this Annual General Meeting beforehand. Let's look if we have received any questions during the webinar. It seems not. So if anyone has any questions, I encourage to raise them. And hopefully, we can answer.

Yes. I have a question. So for all those bonds outstanding that during the terms include any limitations to pay that cafeteria flexible anytime a liquidity of that.

Yes. I don't know if the webinar, I think this can hear the same because we're in a quite sizable room. So I'll repeat the question. Basically, the question is about the bond limitations, are there any limitations that would prevent us from repaying the bonds. So maybe Gerda, you can answer.

Condemnation that the minimal amount we can prepaid is starting to do million the animal or.

And if I may add another small limitation is that repayment costs repayment fees. So there is a little penalty, which the bondholders will charge that penalties diminishing as the time those. So the later, the repayment takes place, the smaller that repayment early repayment fee.

And as mentioned, if we have free cash, then definitely, it will be used if we reach this 3 million threshold of free cash, which we have then we will definitely repay the bonds.

Yes. So maybe we will keep doing the official meeting and then we can have some discussion. But yes, what mines FCD top is pretty on so you have to open a discussion but what do you believe and Crane quarter 2 or the more oily quarter this year? I mean to bid it in terms of excess carcinoma. Alaska are a Bestrane -- so we are the expectation on the pricing and definitely would like to get very good pricing. But these are very big dividends, what is on expectations and what are the bias expecting?

Let me help here answering this question because it's part of the information, which maybe is confidential and should not be communicated to the market for its burn finding. This fund, like any seller in a situation like this is on a very delicate negotiation power or lack of it. It's obvious that everybody would like to come and buy a good asset for a very distressed price. And the duty of this management towards all of the unitholders is not to allow such distressed sales to take place for as long as better auctions are available. And therefore, the communication this management we're giving to the market to any potential virus is, first of all, that there are 3 properties identified for sale for different reasons why these 3 are selected mostly because this management, and we believe that they are liquid. They are smaller in size, they should attract certain smaller type of investors who are still out there on the market. B, they are in a decent commercial ship. So they should be okay to finance with bank loans and therefore, make some sort of buyer interest I think we can answer today in terms of future guidance that it's not likely that any of those disposals would close in Q2 because Q2 is essentially on this on and we have also communicated on this meeting that we give it Q3 to see how much of disposals can take place. And if that is sufficient for the management to believe that we are on the right track to repay the bonds were not to face the bond bridges before the year-end of '26, then we are not bringing up for the consideration of the management and Supervisory Board and ultimately the unitholders a question of your equity raising new capital raising because that would be an obvious way to solve this over-indebtedness problem. So Q3 will be very important in terms of how the disposals of these 3 are a few of those 3 properties are progressing, and that's the calendar, which is in every 1 of these conversations, which the management is selling with prospective clients. But we cannot -- once there are binding agreements, those will be communicated to the market to the stock exchange until then, you can say today, there are no commitments regarding any of the 3 sales.

There are online question about is the share of units published somewhere to the the majority of unitholders are the reported somewhere. So we have the report on the unitholders in our quarterly and annual report. There is a section at the back of the financial report, where 1 can see the investors. Unfortunately, in the current setup now that does not allow us to see the full unitholders as some of the unitholders use nominees, like banks, to hold their accounts and then we can only see the banks. So we are disclosing as much information as we can. Any other questions? Well, were we waiting for the voting results? Yes.

This is interesting to mention here, property management. The thing helps grow -- how do you manage to pay your objective to become managing I was assuming this is part of being for any procedure.

So it's already Yes. Just we -- initially, we deployed and hired the full property management teams house -- but as you know, like for the fund of such size, there are definitely some transition period, which is needed, hiring the right personnel and deploying them. So, we've now in Q2, are mostly them. There's 1 of 2 positions that still for debate, but basically the una assets are now managed by internal part.

It means that recruitment or still outsourcing

Could you clarify the question?

Yes, hiring. How it means you are going to recruit people versus outsourcing, yes. So the people are fully in-house and recruited to work in-house. There are some people that are working within the fund limits and the restrictions that we have on the fund rules that are working inside the SPVs and subsidiaries of the fund there are some other people who are exclusively working with the assets and providing services on a contractor basis. They are 100% dedicated just to these assets in all 11 assets that we have. Yes. So it's different teams for different assets, not just one asset has an individual property management team. the bigger assets have typically the team of 4 or 5 people and the smaller, for example, in case of Kipocrada, there's just 1 person who's providing the property management and the leasing service, but then we, of course, have outsourced facility management and other

And small cost effective?

Yes. definitely. I would say that there are -- first of all, we get the full dedication. And then second of all, it's cost effective. because we can avoid brokerage fees, we can avoid some additional service fees, and you have a full dedicated person. -- where we have typically the salary, but then some, of course, motivational scheme as well.

Do have also long-term cecal now assuming that everything goes very smoothly and potentially maybe then to start acquiring some new properties onwards with a long-term goals?

Let me help here with the manager because it's let me be very honest here. There are different ways in which this fund could continue living a successful life. But we have to get there to have that platform, which will allow for a choice. For now, this fund we can fantasize about growing certain type of ownership of certain type of assets. It's the competence of the team, let's say, is all about -- just to give an example, the city center progresses like Poste such assets in Riga and business or something else. But for now, this is a luxury conversation, which we cannot honestly have. There are certain ideas what this fund could be. But first of all, it has to stop burning cash and address the over leverage. And once we are there, then we can have trust together that this works, that this has some sort of future because, again, quite honestly, if it doesn't, this fund should liquidate in a gradual fashion if the market conditions are such that the assets could be sold meaningful price tax, what it should do, if it cannot stop burning cash. We came to this recognition. What we cannot afford to do is just to go and sell or to the first buyer for whatever they paid to date because it's not the quality of the assets of the quality of the market conditions place. We would all be Absolutely. I think -- it might, it might. It's all of us around the table with the same care and the same that this will work out.

Let you come across very inspiration.

So Inspirational is not to much Delivering this thing is what we.

A positive outlook, not all negative.

Absolutely bigger on dams. We have to be brutally honest with each other with investors with partners. And then once we underwent the full transition, then we can set a clear strategy for the future. At the moment, I do believe it's too early.

I have question all of some FX or bid-out needs for the next, let's say, 12 months in major needs there or you have -- you said you have contacted the nonessential like things going.

Well, most of the CapEx that we have budgeted at the moment is going to towards the improvement of the assets related to tenant activity. So signing of the lessees and majority, the cost is attributed to there. And then once we have done and have kind of stabilized the situation, then we can consider more long-term asset enhancement activities.

It's still 15% of the space in the portfolio, which the fund owns today, which has no tenants. Most of that space to get the ending will require some expenditures on behalf of the landlord, meaning the fund. So negative outflows to get that base built the there. But in terms of the budgets, which are prepared for the properties and the liquidity, which the has, it seems that 1 would pay for such expenditures over the period of next 12 months to answer your question. So we funded. The real challenge is that the cash flow operation cannot continue repaying the bonds and over excess then. So that can be only achieved through property disposals have the bank, whatever is left could be -- would be used for further down payment of the margin.

5% vacancy is not critical, but these events.

If you have finance 6% is the loans -- it's the problem of averages. But even now 1 who is debt and 1 who has a fever on average, is 36.6%. But the problem of the average is that some properties have you can see to be operationally, especially when you go into shopping centers. shopping center needs certain minimum level of activity so that it is on the right positive track in terms of customer experience, in terms of cash flow, in terms of far releasing traction. -- it's not that dramatic if you have it in an office building being -- the other of the standards are not so much affected by -- but then, of course, keeping cost money just to keep the vacancy real estate taxes, security, cleaning of the territory. So there is a cost to date.

I have now the results of voting for the free agenda items, so once it and then continue the discussion like in an informal setting. So in we have reached the quarter today as more than 50% of the whole fund investors and unitholders have been interested for this meeting to or power of Automic. So first agenda item was the election of Mr. Pitera as the new member of the Supervisory Board of the funds. -- in favor of Mr. Brit has voted 123 million, 73 units, which is roughly the whole attendance of the decision is passed against voted 9 million units. And so the decision is passed, and Mr. Brett Parent will become Supervisory Board member of the fund effectively as of today. On the second agenda item, we have the decision to pay a remuneration of EUR 11,000 for Mr. Print. We -- the decision is in paper in favor 1288,473 units have voted in favor and then units have voted against, and we had 74,000 500 million as being neutral. So the decision is passed, and Mr. It Parents will receive an annual remuneration of 11,000 for his tenure as the Supervisory Board member. Last item is the decision to extend the mandate a whole pre supervisory board members of the fund until 2028, June. So and with 23,878,382 units have voted in favor. So the decision was again passed and the 5,500 units were neutral. So all 3 decisions are passed, and the mandates are extended for 2 years. Mr. Pitera is elected. And with this, the voting is fully done and legally binding. So for those quorum attendance through Webinar and line I want to thank you. There are no further questions in the webinar. So thank you. It was lovely to have you and see you next time. Bye.