Stock Exchange Release: Additional information on acquisition by Tallink of the shares in Silja Oy Ab

AS Tallink Grupp, Stock Exchange Release
14.06.2006

Additional information on acquisition by Tallink of the shares in Silja Oy Ab

On 12 June 2006, Tallink Grupp AS (“Tallink”, TSE:TAL1T ET, www.tallink.com) published a first stock exchange release about entering into a definitive agreement with Sea Containers Ltd. (“Sea Containers”, NYSE: SCRA and SCRB, www.seacontainers.com), whereby Tallink and its wholly-owned subsidiary AS Tallink Scandinavian will acquire from Sea Containers’ subsidiary Silja Holdings Limited 100 per cent of the issued shares in Silja Oy Ab (“Silja”, www.silja.fi) for the consideration of approx. EUR 450 million (EEK 7,041 million) cash and 5 million newly issued ordinary shares in Tallink.

The above-referred stock exchange release contained the basic information about the transaction, target company and its business and vessels included in the transaction as well as the agreed consideration for the Silja shares. In view of the transaction being considered as a significant acquisition of holding pursuant to the TSE Rules, Tallink hereby publishes additional information about the structure of the transaction, terms of payment for the shares of Silja, Silja’s financial results for the previous financial years and other matters

required to be disclosed in accordance with the TSE Rules. This stock exchange release does not repeat the information already disclosed in the first release. For the relevant information please refer to the Tallink’s stock exchange release of 12 June 2006.

The structure of shareholders and composition of managing bodies of Silja

Currently Silja Oy Ab is 100% owned by Silja Holdings Limited which is a wholly-owned subsidiary of Sea Containers. Upon completion of the transaction 100% of the Silja shares will be owned by Tallink’s subsidiary AS Tallink Scandinavian.

The Board of Directors of Silja Oy Ab currently consists of Robert Mackenzie (Chairman), Paul Clark, Ian Charles Durant, Eric David Nilsson, Tor Nils Gustaf Palmgren. On completion of the acquisition of Silja shares by Tallink the existing members of the Board of Directors will resign and new Board of Directors will be elected by Tallink. Antti Pankakoski will continue as the Managing Director of Silja Oy Ab also after the completion of the transaction.

Terms of payment of consideration for the shares of Silja

The consideration to be paid for the shares of Silja will consist of payment of EUR 450 million (EEK 7,041 million) and of 5 million ordinary shares of Tallink to be issued to a subsidiary of Sea Containers, Silja Holdings Limited.

The EUR 450 million (EEK 7,041 million) cash consideration will be paid at the completion of the transaction after being adjusted based on Silja’s estimated financial figures (debt, cash and working capital) as at 30 June 2006 and the amount will be subject to further adjustment based on actual financial figures from Silja’s financial statements as at 30 June 2006 to be prepared following completion.

The issue of Tallink’s 5 million new ordinary shares will need to be approved by the general meeting of Tallink by the time of completion of the transaction and the shares must be issued by 31 August 2006. The 5 million new ordinary shares will be issued at a subscription price to be determined by a resolution of Tallink’s general meeting against an in-kind contribution consisting of the number of Silja shares having corresponding value (to be confirmed by auditors). Upon completion, the Silja shares that will be delivered to Tallink will be further transferred from Tallink to AS Tallink Scandinavian who will thereafter own 100% of shares in Silja.

Tallink Scandinavian will pledge 100% of shares in Silja to the banks financing the acquisition as part of the security package for EUR 350 million loan that will be used to refinance existing loans of Silja. Silja Holdings Limited may not sell the shares in Tallink within 12 months of the sale’s completion without Tallink’s permission.

Silja’s financial results in 2003 – 2005

A comparative summary of Silja’s financial results in 2003 – 2005 is provided in the table below:

SILJA OY AB CONSOLIDATED INCOME STATEMENT (EUR ' 000)	2005	2004	2003
Gross revenues	499 854	514 310	545 677
Net revenues	469 505	485 646	516 715
Materials and supplies	-117 658	-119 322	-122 280
Personnel expenses	-118 022	-121 495	-128 486
Depreciation	-29 913	-29 740	-27 298
Non-recurring items	-78 569	-3 497
Other operating costs	-219 455	-189 195	-211 639
Operating result	-94 112	22 397	27 012
Share in income of associated companies	107	169	179
Financial income and expenses	-12 409	-13 334	-18 378
Result after net financial items	-106 414	9 232	8 813
Extra ordinary income	4 411
Taxes	43	-73	-458
Net result for the financial year	-101 960	9 159	8 355
CONSOLIDATED BALANCE SHEET EUR ' 000	31.12.2005	31.12.2004	31.12.2003
Fixed assets and other long term investments
Intangible assets	22 031	23 219	12 371
Tangible assets	368 389	461 387	461 412
Long-term investments	64 138	37 198	35 475
Total fixed assets and other long term investments	454 558	521 804	509 258
Deferred tax receivable	55	1 649	1 527
Current assets
Inventories	8 006	7 810	7 787
Receivables	40 595	43 740	42 528
Cash and bank deposits	25 950	28 374	28 867
Total current assets	74 551	79 924	79 182
Total assets	529 164	603 377	589 967
Total shareholder's equity	90 176	192 146	191 403
Liabilities
Long-term liabilities	291 543	316 265	254 937
Short-term liabilities	147 445	94 966	143 627
Total liabilities	438 988	411 231	398 564
Total shareholder's equity and liabilities	529 164	603 377	589 967

The audited financial statements of Silja Oy AB for the 2003 and 2004 and non-audited financial statements for 2005 are available at http://www.tallink.com.

It should be noted that due to certain changes in the assets owned by Silja before completion the financial statements of Silja for 2003-2005 the summary of which is provided above do not give an accurate overview of the results of operation of that part of the ferry business of Silja Oy Ab that will be transferred to Tallink and cannot therefore be relied upon while making any investment decisions. These figures represent combined results of Silja business in relevant financial years and they include certain vessels, assets and services that will be excluded from the transaction and will not be acquired by Tallink. The relevant vessels and services which will be excluded from the transaction are the fast ferry business between Helsinki and Tallinn (and including two SuperSeaCat fast ferries), Silja’s ‘legacy’ vessels (i.e. Walrus, Opera and Finnjet). Furthermore, the vessels SkyWind and Silja Europa are not currently owned by Silja but will become part of Silja’s business prior to completion.

The transaction includes six ships: Symphony and Serenade operated on Stockholm-Helsinki route and Europa, Festival, SeaWind and Skywind operated on Stockholm-Turku, and their staff, facilities and the Silja brand. According to the estimated pro forma numbers for 2005 of these 6 vessels and business now being sold to Tallink as were prepared in the course of preparation of transaction:

To the knowledge of Tallink, there have been no significant changes in the business intended to be acquired by Tallink since the end of the financial year 2005.

Overview of the loans undertaken by the Silja

It is a condition of the share purchase agreement between Tallink, Tallink Scandinavian and Sea Containers that Silja shall fully repay its existing loans and debt obligations on completion of the transaction and prior to the transfer of Silja shares to Tallink. Certain financial leases and minor loans relating to Silja’s daily business in the aggregate amount of appox. EUR 6 million (EEK 94 million) will remain in place also upon completion of the transaction. The debt remaining in Silja will accordingly reduce the consideration to be paid by Tallink for Silja shares.

The relevant existing external loans of Silja will be repaid from the proceeds of a new loan in the total maximum amount of EUR 350 million (EEK 5,476 million) to be taken by Silja under a loan agreement concluded between Silja and a syndicate of banks on 11 June 2006 and negotiated with the participation of Tallink. The loan is intended to be drawn down upon completion of the transaction. The security to be provided for the relevant loan will include security arrangements customary for this type of transaction including mortgages over the Silja’s vessels, pledge of shares in Silja and guarantees from Tallink, Silja and certain of its subsidiaries.

The referred amount of Silja’s loan is considered as part of the EUR 450 million (EEK 7,041 million) cash consideration. The remaining amount of cash consideration will be financed though equity of approximately EUR 60 million (EEK 939 million) and bank loans in the amount of approximately EUR 40 million (EEK 626 million) to be taken by Tallink group companies upon completion of the transaction. The relevant loan agreements have been concluded on 11 June 2006.

After the completion Silja will have above mentioned EUR 350 million long-term loan and approximately aggregate of EUR 6 million of smaller loans and finance leases.

Information on significant court or arbitration proceedings involving Silja

Silja is involved in certain court proceedings relating to its daily business activities. On the basis of the information received by Tallink in the course of preparation of the transaction, however, Tallink believes that such proceedings would not have a material effect on the business activity of Silja group.

In addition to the above, as of 2005 Silja has been involved in certain proceedings initiated by Bureau Veritas against Silja in relation to m/v "Estonia". At this stage, however, no specific allegations have been made and no claims have been filed against Silja. Based on the information received by Tallink in the course of preparing the transaction, Tallink believes that any possible claim by Bureau Veritas on this subject matter is not grounded.

Information on valid contracts between Tallink and Silja

Currently there are no valid contracts between Tallink and Silja or its subsidiaries.

Janek Stalmeister
Financial Director
AS Tallink Grupp
+372 6409 800