Baltic Horizon Fund (NHCBHFFT) Investor Update summary

Rationale for capital raise and fund stabilization

• Aims to improve capital structure with a small capital injection from current and new investors, targeting a lower LTV of 50% and refinancing expensive debt.

• Plans to dispose of a non-strategic asset (~€10 million), refinance loans, and raise up to €10 million via private placement, depending on market price.

• Management and anchor investors intend to participate in the capital raise, signaling confidence in the fund's future and are expected to commit about half of the new capital.

• The fund is not considering liquidation; focus remains on long-term value creation and becoming a dividend payer in 2025.

• Recent progress includes signing new long-term leases and ongoing negotiations to fill vacancies, especially in key properties.

Private placement structure and investor impact

• Private placement is chosen for efficiency, lower costs (€10,000–€20,000 vs. €200,000+ for public offering), and ability to target up to 149 retail investors per EU country.

• Offering is limited to up to 20% new units to minimize dilution; all investors can acquire up to 20% additional units on the open market.

• Pricing is based on a 90-day average, a standard mechanism to reduce volatility and ensure fairness.

• Management team holds over 500,000 units and plans further equity investment.

• If shareholders vote against the placement, focus will shift to asset sales and debt refinancing, though market conditions are challenging.

Operational and financial outlook

• Targeting 90% occupancy in 2024 and 95% in 2025, with ongoing efforts to sign new tenants and improve NOI.

• Nearly half of an expensive €42 million bond has been redeemed; €22 million remains, with further refinancing planned.

• The fund aims to resume dividend payments in 2025, balancing deleveraging with investor expectations.

• NAV is determined by external valuators and market offers, with management disputing some downward adjustments.

• Long-term strategy is to hold and improve core assets, not to sell at current low valuations.