Trading Update

Metro Baltic Horizons plc (MET.L)

Trading Update

15 February 2011

The Board of Directors of Metro Baltic Horizons plc (the "Company" and, with its subsidiaries, the "Group") today provides the following update:

The Company's subsidiary, Pedragon Investments Limited ("Pedragon"), has executed an agreement for the disposal of the Group's remaining interest in Metro Plaza, Viru Square, Tallinn ("Metro Plaza") to Lords LB Baltic Fund 1 ("Lords LB"). The investment in Metro Plaza is held via Focus Kinnisvara OU ("Focus"). Prior to the disposal the Group held a 50% interest in Focus along with Lords LB who, as a result of their acquisition in October 2010, also held a 50% interest in Focus. The agreement has been executed and closing is due no later than 28 February 2011. The agreement is also subject to the prior consent of the bank financing the property. Lords LB is and remains independent of both the Group and the Investment Manager. Under the terms of the agreement, the total consideration, payable in cash, to Pedragon is €3m. The disposal is based on the valuation figure of €19.2m for Metro Plaza, the same valuation as per the interim accounts for the period ended 30 June 2010. The proceeds of the disposal will be used by the Group to pay Group debt, creditors (including possibly the loan notes secured against the Group's St Petersburg property (the "Loan Notes")) and for working capital purposes. Pursuant to the disposal, the shareholders' agreement entered into in October 2010 by Pedragon and Lords LB will be terminated.

The disposal of Metro Plaza will provide vital stability to the Company. However, there remain matters to be addressed to correctly ascertain the value and financial position of the Company, including but not limited to a review of prior transactions with parties related to or connected with the investment manager as well as the current value of the remaining significant asset being the St Petersburg property. There remain a number of outstanding liabilities including, as referenced above, the Loan Notes which have an accrued value of €1.67m to 28 February 2011.

The entire issued share capital of BAP Holding OÜ ("BAP Holding"), the company that issued the Loan Notes, has recently been sold to a party that is unrelated, unconnected and independent of both the Group and the investment manager. The Board has initiated discussions with the new owner of BAP Holding with a view to agreeing terms to discharge the Loan Notes.

The Company has been in negotiations with the bank providing the loan facility for Pirita Road, Tallinn and has successfully agreed to make interest only payments for the period until 20 May 2011, following which a strategic plan for the development of the property and the repayment of the debt will be put in place.

Further to the previous announcement regarding the suspension of the Company's shares, the Board continues to investigate the transactions of the Group where they pertain to related parties, outstanding liabilities and the valuation of the Group. The Board is considering, inter alia, the future of the Company including potentially delisting the Company's shares from AIM and/or and the sale of its assets and/or the Company and the Board intends to put suitable proposals arising from these deliberations to shareholders when complete.

Pending the result of the review, and clarity regarding certain assets and liabilities of the Company, trading in the Company's shares on AIM remain suspended.

A further announcement will be made in due course.

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Notes to Editors 

Metro Baltic Horizons (ticker code: MET.L) is a property investment company targeting development opportunities in the cities of St Petersburg, Russia and Riga and Tallinn, the capitals of Latvia and Estonia respectively. The Company's Investment Manager is a member of the Metro Capital Management Group, an experienced property asset manager and developer with offices in Riga, Tallinn and St Petersburg. It has a team of 18 experienced professionals managing a portfolio of 21 projects across the region where it has been active since 2001.