Pioneer Property Group ASA

Quarterly Report • Feb 19, 2020

COMBINED REPORT FOR PIONEER PROPERTY GROUP ASA AND PIONEER PUBLIC PROPERTIES AS

Highlights of the Q4 2019 report

• Total revenue from continued operations in the fourth quarter of 2019 was MNOK 1.2 compared to MNOK 0.1 in the fourth quarter of 2018. The increase is related to the acquisition of new properties.
• Operating profit (EBIT) for the quarter was a negative MNOK 8.9 and pre-tax profit for continuing operations was MNOK 41.6 compared to operating profit (EBIT) of negative MNOK 0.9 and pre-tax profit of negative MNOK 0.3 for the fourth quarter of 2018. Profitability in the fourth quarter was negatively affected by non-recurring payroll expenses related to the sale of PM and PPP, and negative fair value adjustments related to transaction costs of the new acquisition. Further pre-tax profit was affected by a positive fair value revision of the earn-out consideration of MNOK 40 from the sale of PM and PPP.
• As previously communicated PPG entered into a purchase agreement with Odin Bidco AS regarding the purchase of 100% of the shares in Pioneer Public Properties AS and Pioneer Management AS from PPG on 9 October 2019 with a total purchase price for the shares of MNOK 2,734. Closing of the Transaction took place on 24 October 2019. A gain on sale of MNOK 694 was recorded over the quarter, and were included as part of profit from discontinued operations.
• PPG's subsidiary Pioneer Property Group International AS acquired over the quarter 8 properties in Poland, 3 properties in Netherlands and 1 property in Sweden from Care Properties Finance AS, a wholly owned subsidiary of Norlandia Health & Care Group AS.
• Based on the development of the PPP group, the earn-out consideration of MNOK 100 related to the sale of PPP and PM was paid in full subsequent to the quarter.
• PPG purchased 1,631,447 preference shares in PPG at a price of NOK 102.00 per preference share.
• Over the quarter PPG paid a quarterly dividend to holders of preference shares of NOK 1.875 per preference share and an extraordinary dividend to the holders of ordinary shares of NOK 27.74 per ordinary share charged to the company's share premium reserves.

Background for the transaction and strategy going forward

During the past years, the Board of Directors has experienced interest both from institutional investors providing long term debt financing, and from other third parties, with respect to a potential refinancing of, or sale of the assets or shares in, PPG's subsidiaries. Based on this, the Board of Directors initiated a process to evaluate different strategic alternatives for the group. The alternatives included a broad range of options including, but not limited to, a recapitalization of the group including a refinancing of Pioneer Public Properties AS' outstanding bond loan, a continuation of the group's current strategy and/or a sale of all or parts of the shares in PPG's subsidiaries. Based on the interest from potential buyers, the board decided to proceed with a sale of the shares in Pioneer Public Properties AS and Pioneer Management AS.

The aim of the board of directors is to continue to invest in real property and enter into long-term leases with governmental-backed tenants in Europe. Further, the Board of Directors will evaluate the possibility of establishing a new division within the Group with focus on investments within commercial real estate, such as office buildings and hotels. PPG has also expanded its capital management, allowing for greater flexibility within liquidity management however always having sufficient reserves to meet PPG's financial obligations.

The current real estate portfolio consists of a total of 13 preschool properties located in Norway, Sweden, Netherlands and Poland.

Key material events during the quarter

On 9 October 2019, PPG entered into the Purchase Agreement with Odin Bidco AS regarding the purchase of 100% of the shares in Pioneer Public Properties AS and Pioneer Management AS from PPG with a total purchase price for the shares of MNOK 2,734. PPG was also entitled to an earn-out of up to MNOK 100 conditional upon the future development of the PPP group. A portion of the purchase price was also used to reinvest in Odin Bidco AS, resulting in a 10% equity stake in the company with a value of MNOK 256. Closing of the Transaction took place on 24 October 2019. Odin Bidco is owned by a consortium consisting of Australian pension funds managed by Whitehelm Capital and the Whitehelm European Infrastructure Fund I incorporated company. The sale marks the completion of the strategic process that was initiated in the first quarter of 2019. The preference shares issued by PPG will not be affected by the transaction and the company will continue to be listed on the Oslo Stock Exchange.

Over the quarter, Pioneer Public Properties AS entered into a share purchase agreement to acquire a property portfolio. A completion of said transaction would trigger a payout of the entire earn-out consideration of MNOK 100 to PPG. PPG subscribed in December in a share capital increase in Odin Bidco AS in order for the company to be capitalized to close the transaction, increasing its investment with MNOK 23 in Odin Bidco AS and maintaining a 10% economic ownership. The transaction closed subsequent to the quarter, and PPG has received the full earn-out consideration of MNOK 100. Please see note 9 for further information with regards to the fair value estimates of the earn-out consideration.

PPG's subsidiary Pioneer Property Group International AS acquired over the quarter 8 properties in Poland, 3 properties in Netherlands and 1 property in Sweden from Care Properties Finance AS, a wholly owned subsidiary of Norlandia Health & Care Group AS. All of the properties are preschools with triple-net contracts, with an average length to expiry of 15 years and Norlandia as the operator. The total purchase price was EUR 18.2m which will increase annual revenue with EUR 1.1m.

Based on the cash balance in PPG following the sale of PPP and PM, the general meeting changed the company's objective in the articles of association to allow for more flexible capital management. The company's main business will continue to be investments in real property and related activities, but PPG now has a greater flexibility for liquidity management. The new liquidity strategy is being evaluated in close cooperation with the board of directors. Over the quarter, PPG purchased bonds in Norlandia Health & Care Group AS (NHC02) with a par value of MSEK 29.5 and bonds in NHC02 with a par value of MSEK 23.5 subsequent to the quarter. Further, subsequent to the quarter, PPG subscribed for MNOK 50 in a reputable Nordic high yield fund.

Over the quarter PPG purchased 1,631,447 preference shares in PPG at a price of NOK 102.00 per preference share, hence owning approx. 10% of the share capital. Subsequent to the quarter the general meeting passed a resolution to decrease the share capital of NOK 1,631,447 in order to redeem 1,631,447 of PPG's own preference shares. The decrease is still pending at the time of publication, with a creditor deadline 20 February. PPG has to date not received any inquiries.

Over the quarter, PPG paid a quarterly dividend to holders of preference shares in total NOK 1.875 per preference share and an extraordinary dividend to the holders of ordinary shares of NOK 27.74 per ordinary share charged to the company's share premium reserves.

Subsequent events since the end of the quarter

Subsequent to the quarter PPG received the earn-out consideration related to the sale of PPP and PM of MNOK 100, bought MSEK 23.5 in NHC02 bonds and subscribed for MNOK 50 in a reputable Nordic high yield fund. Further, subsequent to the quarter, the general meeting passed a resolution to the decrease the share capital of NOK 1,631,447 in order to redeem 1,631,447 of PPGs own preference shares. The decrease is still pending at the time of publication, with a creditor deadline 20 February. PPG has to date not received any inquiries.

Overview of the financial accounts for the fourth quarter of 2019

Total revenue from continued operations in the fourth quarter of 2019 was MNOK 1.2 compared to MNOK 0.1 in the fourth quarter of 2018. The increase is related to the acquisition of new properties from NHC.

Operating profit (EBIT) for the quarter was a negative MNOK 8.9 and pre-tax profit for continuing operations was MNOK 41.6 compared to operating profit (EBIT) of negative MNOK 0.9 and pre-tax profit of negative MNOK 0.3 for the fourth quarter of 2018. Profitability in the fourth quarter was negatively affected by nonrecurring payroll expenses related to the sale of PM and PPP, and negative fair value adjustments related to transaction costs of the new acquisition. Further pre-tax profit was affected by a positive fair value revision of the earn-out consideration of MNOK 40 from the sale of PM and PPP.

No income was recognized from the associated company, Odin Bidco AS, as the consolidated financials were not ready at the time of publication. This will be included in the annual report.

The sold entities were classified as discontinued operations and held for sale prior to completion of the sale in the quarter. The profit from discontinued operations over the period amounted to MNOK 691.2, of which MNOK 693.7 relates to gain on sale, and a negative MNOK 2.5 from operating activities. The profitability from the operating activities were negatively affected by non-recurring other financial expenses related to the strategic review of the PPP portfolio of MNOK 11.9.

At the end of the quarter PPG had total assets of MNOK 2,471.3 where MNOK 471.0 were related to investment property and shares in the associated company, Odin Bidco AS, and with a cash balance of MNOK 1,860.8. Total equity amounted to MNOK 2,409.6 and there was no long-term debt in the group.

Responsibility statement

The interim financial statements for the period have been prepared in accordance with applicable accounting standards and give a true and fair view of the assets, liabilities, financial positions and profit and loss of the Group.

We also confirm that, to the best of our knowledge, the interim financial statements give a true and fair reflection of important events that have occurred during the financial year and their impact on the financial statements, as well as a description of the principal risks and uncertainties facing the Group.

18 feb 2020

Roger Adolfsen Chairman

Sandra Henriette Riise Geir Hjorth Board Member Board Member

Even Carlsen Nina H. Torp Høisæter Board Member Board Member

Consolidated Income Statement - Pioneer Property Group ASA

NOK thousand	Note	Q4 2019	YTD 2019	Q4 2018	FY 2018
Continuing operations
Income from rent		916	1,184	8 7	347
Other income		319	319	-	0
Total Income	4	1,235	1,503	8 7	348
Payroll expenses		5,218	5,765	140	559
Other operating expenses		2,584	5,141	817	2,232
Total Expenses		7,801	10,907	956	2,791
Fair value adjustment on investment properties	5	-2,286	-2,083	-	1,500
Operating profit (EBIT)		-8,853	-11,487 -	870	-943
Interest income		8,476	8,476	4 2	4 4
Other financial income		45,474	45,473
Interest expenses		261	261	-525	3 4
Currency gain (-) / loss		3,239	3,239	-1	3 0
Other financial expenses		0	-342	-	-
Net Finance		50,450	50,791	568	-20
Profit/(loss) before tax, continuing operation		41,597	39,304 -	302	-963
Income taxes		4,390	4,707	1,879	2,658
Profit/(loss) for the period, continuing operations		37,207	34,597 -	2,181	-3,621
Profit/(loss) discontinued operations, net of tax	3	691,158	805,551	97,301	198,730
Profit/(loss) for the period, total operations		728,364	840,148	95,120	195,109

Consolidated Statement of Comprehensive Income - Pioneer Property Group ASA

Exchange differences, from translation of foreign operations	-741	348	1,387	-424
Total comprehensive income	727,623	840,496	96,507	194,685
Total compreshensive attributable to
Shareholders of the parent	727,623	840,496	96,657	193,950
Non-controlling interests	-	-	-150	735
Profit/(loss) for the period	727,623	840,496	96,807	194,685
Earnings per share (NOK), continuing operations
Basic earnings per preference share	1.88	7,5	1.88	7.5
Basic earnings per ordinary share	2.55	-1.44	-1.46	-5.34
Dividends per preference share	1.88	7,5	1.88	7.5
Dividends per ordinary share	27.74	27.74	0	0
Earnings per share (NOK), total operations
Basic earnings per preference share	1.88	7.5	1.88	7.5
Basic earnings per ordinary share	72.97	80.64	8.45	14.91
Dividends per preference share	1.88	7.5	1.88	7.5
Dividends per ordinary share	27.74	27.74

Consolidated Statement of Financial Position - Pioneer Property Group ASA

NOK thousands	Note	31/12/2019	31/12/2018
Assets
Investment property	5	191,453	5,269,296
Deferred tax assets
Associated companies	3,10	279,529	-
Loans to other companies			1,000
Total non-current assets		470,982	5,270,296
Income tax
Trade and other receivables	3, 9	116,198	6,269
Other investments		23,258
Cash and cash equivalents		1,860,813	283,271
Total current assets		2,000,269	289,541
Total assets		2,471,251	5,559,837
Equity and liabilities
Share capital		16,314	16,314
Own shares		- 1,631
Share premium		1,202,885	1,487,326
Retained earnings		1,192,013	553,652
Non-controling interest			-
Total equity	6	2,409,581	2,057,292
Borrowings	7	-	2,911,291
Deferred tax		5,621	188,269
Other non-current liabilities		-	575
Total non-current liabilites		5,621	3,100,135
Borrowings	7	-	330,044
Current tax payable		143	24,323
Other current liabilities		55,906	48,042
Total current liabilities		56,049	402,409
Total liabilities		61,670	3,502,544
Total equity and liabilities		2,471,251	5,559,837

Consolidated Statement of Changes in Equity - Pioneer Property Group ASA

		Attributable to owners of the parent
NOK thousands	Note	Share capital		Own Shares Share premium	Retained earnings	Total	Non controlling	interests Total Equity
Balance at 1 January 2018		16,314		1,487,325	431,717	1,935,357		1,935,357
Profit/(loss) for the period					194,374	194,374	735	195,109
Exchange differences from foreign operations					-446	-446	2 1	-424
Total comprehensive income for the period					193,928	193,928	756	194,685
Sale of shares to non-controlling interests					124	124	2,467	2,591
Purchase of shares from non-controlling interests					-23,367	-23,367	-3,223	-26,590
Dividends on preference shares					-48,750	-48,750		-48,750
Transactions with owners					-71,993	-71,993	-756	-72,749
Balance at 31 December 2018		16,314		1,487,325	553,653	2,057,293	0	2,057,293
Profit/(loss) for the period					840,148	840,148	0	840,148
Exchange differences from foreign operations					348	348		348
Comprehensive income for the period				0	840,496	840,496	0	840,496
Bought own shares			-1,631		-165,573	-167,204		-167,204
Transactions with non-controlling interests								0
Dividends on ordinary shares		6		-272,253		-272,253		-272,253
Dividends on preference shares		6		-12,187	-36,562	-48,750		-48,750
Transactions with owners			-1,631	-284,441	-202,135	-488,207	0	-488,207
Balance at 31 December 2019		16,314	-1,631	1,202,885	1,192,014	2,409,581	0	2,409,581

NOK thousands	Note	2019	2018
Cash flows from operating activities:
Profit before income tax total opertaion (including discontinued operations)	3	875,305	246,834
Adjustments for:
Fair value adjustments on investment property		-46,061	-120,397
Other adjustment		-45,473
Interest net		-8,654	137,993
Borrowing cost	7	118,083
Taxes paid		-16,971	-20,781
Exchange gains/(losses)		10,413	-4,571
Profit/loss on sale of fixed assets		-693,508
Changes in working capital:
Trade receivables		-23,978	-3,326
Trade payables		45,583	-4,656
Other accruals		-24,723	-8,282
Generated from operations		190,016	222,813
Interest received		8,654	651
Interest paid		-115,064	-134,137
Interest received
Cash generated from operating activities		83,607	89,327
Cash flows from investing activities:
Proceeds from sale of Subsidiaries/properties		2,182,412
Purchase of subsidiaries / properties		-52,793	-346,367
Purchase of shares		-
Purchase of bond		-23,491
Purchase of receivables		-150,007
Other long term receivables		82,054
Proceeds from sale of shares and bonds
Cash from investing activities		2,038,174	-346,367
Cash flows from financing activities:
Proceeds from debt to financial institutions			955,021
Proceeds from other borrowings
Repayments of debt to financial institutions	7	-56,068	-487,756
Repayments to other borrowings
Proceeds from shares issued
Repayment of shares issued
Purchase of own shares		-167,204
Dividends	6	-321,004	-48,750
Dividends paid to non-controlling interests
Transactions with non-controlling interests			-15,787
Cash from financing activities		-544,276	402,729
		-	-
Change in cash and cash equivalents		1,577,505	145,689
Cash and cash equivalents at beginning of period		283,271	138,815
Exchange gains/(losses) on cash and cash equivalents		3 7	-1,233
Cash and cash equivalents at period end		1,860,813	283,271

Consolidated Statement of Cash Flows - Pioneer Property Group ASA (including discontinued operations)

Notes to the Financial Statements - Pioneer Property Group ASA

Note 1: General information

Pioneer Property Group ASA, which is the parent company of the Pioneer Property group (the Group), is a public limited liability company incorporated and domiciled in Norway, with its corporate headquarters in Oslo. Pioneer Property Group ASA is listed on the Oslo Stock Exchange.

The company's Board of Directors approved the condensed financial statements on 18 Feb 2020. The figures in the statements have not been audited.

The interim condensed consolidated financial statements for the fourth quarter 2019, ending 31 Dec 2019, were prepared in accordance IAS 34 Interim Financial Reporting. The interim condensed consolidated financial statements do not include all the information and disclosures required in the annual financial statements and should be read in conjunction with the Group's 2018 annual report.

The accounting policies adopted in the preparation of the interim consolidated financial statements are consistent with those followed in the preparation of the Group's annual financial statements for the year ended 31 December 2018, except for the implementation of IFRS 16 Leases as of 1 January 2019, as described below.

Note 2: Implementation of IFRS 16

The Group has adopted IFRS 16 Leases from 1 January 2019 using the simplified transition approach in accordance with IFRS 16.C5(b) and has not restated comparatives for the 2018 reporting period, as permitted under the specific transitional provisions in the standard.

The Group has only one leasing contract at 1 January 2019, the lease of the head office. The lease term was 12 months with no minimum rental period.

For the implementation of IFRS 16 the group has used the following practical expedients as permitted by IFRS 16:

The accounting for operating leases with a remaining lease term of less than 12 months as at 1 January 2019 as shortterm leases.

As a consequence of applying the practical expedient there were no implementation effects of IFRS 16 in the opening balance as of 1 January 2019.

The following accounting principles are applied:

Leases are recognized as a right-of-use asset and a corresponding liability at the date at which the leased asset is available for use by the Group (the commencement date). Each lease payment is allocated between the liability and finance cost. The right-of-use asset is depreciated over the shorter of the asset's useful life and the lease term on a straight-line basis.

Assets and liabilities arising from a lease are initially measured on a present value basis.

The lease payments are discounted using the interest rate implicit in the lease, if that rate can be determined, or the lessee's incremental borrowing rate.

Right-of-use assets are measured.

Payments associated with short-term leases and leases of low-value assets are recognized on a straight-line basis as an expense in profit or loss. Short-term leases are leases with a lease term of 12 months or less.

Note 3: Discontinued operations

On 9 October 2019, PPG entered into the Purchase Agreement with Odin Bidco AS regarding the purchase of 100% of the shares in Pioneer Public Properties AS and Pioneer Management from PPG to a total consideration of MNOK 2.784, including a fair value estimate of the earn-out consideration, of which MNOK 2.478 were paid in cash. PPG was also entitled to an earn-out of up to MNOK 100 conditional upon the future development of the PPP group. The earn-out were valued to MNOK 50 at transaction date as the total earn-out consideration of up to MNOK 100 were conditional upon the future development of the PPP group. Included in the consideration was also an 10% equity stake in Odin Bidco AS with a value of MNOK 256.

Closing of the Transaction took place on 24 October 2019.

A gain on sale of Pioneer Public Property AS and Pioneer Management AS of MNOK 694 was recognized, including transaction cost of MNOK 60 recognized as a reduction of the gain.

The following table shows the consolidated income statement for discontinuing operations and the gain resulting from the transaction:

Discontinuing operations
NOK thousand	Note	Q4 2019	YTD 2019	Q4 2018	FY 2018
Continuing operations
Income from rent		19,091	250,549	73,366	287,842
Other income		124	186	344	386
Total Income		19,214	250,735	73,710	288,227
Payroll expenses		242	4,079	952	952
Other operating expenses		1,008	15,515	-3,788	24,974
Total Expenses		1,250	19,594	-2,836	25,926
Fair value adjustment on investment properties		-	48,697	62,770	118,897
Operating profit (EBIT)		17,964	279,837	139,316	381,199
Interest income		131	178	596	632
Interest expenses		8,978	117,822	37,524	138,635
Currency gain (-) / loss		546	7,174	-16,727	-4,601
Other financial expenses		11,913	12,721	-	-
Net Finance		-21,307	-137,539	-20,202	-133,402
Profit/(loss) before tax		-3,343	142,299	119,114	247,797
Income taxes		-798	30,450	21,813	49,067
Profit/(loss) for the period		-2,545	111,848	97,301	198,730
Gain of sale from discontinuing operations		693,703	693,703
Profit/(loss) discontinued operations, net of tax		691,158	805,551	97,301	198,730
Other comprehensive income
Items to be reclassified to P&L in subsequent periods:
Exchange differences, from translation of foreign operations			1,089	-1,811	-424
Total comprehensive income from discontinued operations		691,158	806,640	95,490	198,306
Earnings per share (NOK) for profit from
discontinued operation
Basic earnings per ordinary share 1)		69,18	77,22	8.67	15.28

The following table shows the cash flow from the discontinued operations in Pioneer Public Property AS and Pioneer Management AS:

Weighted avd ord shares 9,814,470 9,814,470 9,814,470 9,814,470

NOK thousands	2019	2018
Generated from operations	206,811	244,469
Cash generated from operating activities	91,901	110,414
Cash from investing activities	10,762	-522,498
Cash from financing activities	-124,237	561,425
	-	-
Change in cash and cash equivalents	-21,574	149,341
Cash and cash equivalents at beginning of period	265,744	117,636
Exchange gains/(losses) on cash and cash equivalents	37	-1,233
Cash and cash equivalents at period end	244,208	265,744

Note 4: Segments

Diluted earnings per ordinary share

The Group's main business is to own and manage Investment Properties and rent them out to operators of pre-schools. There is no material difference in risk and margins in the different Investment Properties. The Group is therefore considered to operate in one business area and in four geographical areas.

A geographical split of revenues for the quarter is as follows:

					Norway Q4 19 Sweden Q4 19 Polen Q4 19 Netherland Q4 19 Group Q4 19 Polen YTD Netherland YTD Norway YTD Sweden YTD Group YTD 19
Total Income	89	85	319	741	1,235	319	741	358	85	1,503
Fair Value Adjustment	300	-189	-1,686	-711	-2,286	-1,686	-711	503	-189	-2,083
Operating profit (Ebit)	-7,412	-104	-1,367	29	-8,853	-1,367	29	-10,235	-104	-11,676
Investment Properties	10,800		13,187 118,858	48,608	191,453
Cash and Cah equivalents	1,858,979	897	807	130	1,860,813

The segments only include continuing operations.

Note 5: Investment Properties

Overview of account movements 31.12.19

The fair value of Investment Properties is assessed quarterly by management. The Investment Properties are also subject to on-site inspections and technical evaluations. Over the quarter a valuation report was commissioned from external valuation party for the property in Norway and the fair value was adjusted in the fourth quarter based on the new aggregate market value of the Investment Properties from this report.

In Q4 2019 the company acquired 12 properties from Norlandia to a purchase price of EUR 18.2 million. There were 8 properties in Poland, 3 in Netherland and 1 property in Sweden. Management has concluded that the acquired companies were acquired at fair values, and due to the short passage of time it is the management evaluation that this also represents the fair value at year's end. The negative fair value adjustments for Poland, Sweden and Netherland relate to transaction costs incurred in relation to the transaction.

NOK thousand	Norway	Sweeden	Finland	Polen	Netherland	Group
Fair value in the beginning of the year	4,183,000	95,943	990,354	-	-	5,269,296
Addition:						0
-Investment in subsidiaries /properties		13,429		122,297	50,509	186,234
Effect of currency exchange differences in foreign operations		-4,485	-5,157 -	1,753 -	1,190	-12,584
Sale	-4,214,656	-92,463	-990,988			-5,298,107
Fair value adjustments on investment properies	42,456	764	5,790 -	1,686 -	711	46,613
Fair value in the end of the year	10,800	13,187	0	118,858	48,608	191,453
Net change in unrealized gain	300	-189	0	-1,686	-711	-2,286
Overview of account movements 2018 NOK thousand	Norway	Sweeden	Finland	Polen	Netherland	Group
Fair value in the beginning of the year	4,079,000	47,000	605,780			4,731,779
Addition:						0
-Investment in subsidiaries /properties	18,453	47,864	335,778			402,095
Effect of currency exchange differences in foreign operations -		-1,362	16,387			15,025
Fair value adjustments on investment properies	85,547	2,441	32,409			120,397
Fair value in the end of the year	4,183,000	95,943	990,354	0	0	5,269,296
Net change in unrealized gain	85,547	2,441	32,409	0	0	120,397

Note 6: Share capital and shareholder information

The company's preference shares confer a preferential right over ordinary shares to an annual dividend of NOK 7.50 per preference share. Dividend payments are made quarterly with NOK 1.875 per preference share, subject to approval by the Board of Directors on quarterly basis. The Annual General Meeting has given the Board of Directors authorization to approve distribution of dividend on the preference shares.

Over the quarter PPG paid a quarterly dividend to holders of preference shares in total NOK 1.875 per preference share and an extraordinary dividend to the holders of ordinary shares of NOK 27.74 per ordinary share charged to the companies share premium reserves.

Over the quarter PPG purchased 1,631,447 preference shares in PPG at a price of NOK 102.00 per preference share, hence owning approx. 10% of the share capital.

The company has 9 814 470 ordinary shares and 6 500 000 preference shares.

Note 7: Borrowings

Interest-bearing liabilities and available cash and cash equivalents constitute the capital of the Group. Following the sale of PPP and PM, the Group has no external debt.

Note 8: Related-party transactions

NOK in thousand	2019	2018	Nordic high yield fund subsequent to the quarter.
Rent revenue from Norlandia Care Group AS including subsidiaries	74,347	70,661
Rent revenue from Kidsa Drift including subsidiaries	34,646	42,191
Success fee M&A services and Managemnet fee from Hospitality Invest AS	15,459
Success fee from Oslo Corporate Holding AS	5,000
Sale of shares and properties to related parties	39,375	-
Purchase of shares and properties from related parties	49,322	163,502

Transactions made between the related parties are made om terms equivalent to those that prevail in the market at arm length.

Note 9: Fair value adjustments financial assets

The earn-out described in note 3 are measured at fair value at the balance sheet. This resulted in a gain of MNOK 40 from MNOK 50 to MNOK 90, per 31 December 2019.

Note 10: Income from associated companies

PPG is considered to have significant influence in Odin Bidco AS due to PPG's voting rights of approximately 20% and a board seat. No income was recognized from the associated company, as the consolidated financials were not ready at the time of publication. This will be included in the annual report.

Note 11: Subsequent events

Subsequent to the quarter PPG received the earn out consideration related to the sale of PPP and PM of MNOK 100. Further, subsequent to the quarter, the general meeting passed a resolution to the decrease the share capital of NOK 1,631,447 in order to redeem 1,631,447 of PPGs own preference shares. The decrease is still pending at the time of publication, with a creditor deadline 20 February. PPG has to date not received any inquiries. PPG also bought MSEK 23.5 in NHC02 bonds and subscribed for MNOK 50 in a reputable