Esta Holding

The largest Ukrainian investor in the real estate sector

Having consolidated existing assets in real estate, the biggest Ukrainian financial and industrial group System Capital Management established an industrial holding ESTA Group. Today ESTA Group is one of the most successful players in the Ukrainian real estate market. The Group's portfolio includes operating facilities, construction sites and a land bank. ESTA Holding is responsible for making

strategic decisions for ESTA Group business development. ESTA's activity is focused on four business areas: investment and development of commercial real estate of premium segment; hotel business; management and maintenance of real estate. ESTA Group is a responsible corporate citizen. Before making any decision, we assess its contribution to economic and social development of Ukraine.

Park Inn Hotel Welcomes its First Guests

While preparing for European Football Championship in 2012, ESTA Group opened the first hotel in Donetsk controlled by the international operator Park Inn by Radisson. The hotel took in its first guests to test the equipment and to train its staff. The hotel will operate in the test mode during the next few weeks. “The quality issue was always of top priority for ESTA Group. We understand very well that EURO 2012 guests, who stay in ESTA Group hotels, will form their opinion not only about our hotels but about Ukraine as a whole. We realize our responsibility and pay special attention to staff training and adjustment of all systems in this new hotel”, says Maksim Gromadtsov, Chief Operation Officer in ESTA Holding, the managing company of ESTA Group. We would like to remind that in October 2011 ESTA Holding concluded an agreement with the Rezidor Hotel

Group, an international hotel operator, to control the new hotel under Park Inn trade name. After reconstruction the key count increased up to 171 rooms, including: 131 standard rooms, 25 business class rooms, 14 deluxe rooms as well as suits for guests with limited physical abilities. The new hotel differs in its design and concept from those opened under the same brand in other countries. During the project development stage, the designers took into account peculiarities and the specific character of Donetsk region that is why the hotel interior features decor elements connected with the city history and its main sights. David Mohren, who was previously employed in Park Inn Hotel in Yekaterinburg, was appointed as a General Manager of the new hotel. Mr. Mohren possesses wide professional experience since he has been working in hotel business over 18 years.

ESTA Holding to Complete Demolition of the Remaining Buildings of “Yunost” Factory

On 4 May ESTA Holding is planning to start the completion phase of buildings demolition in the territory of the former “Yunost” factory, located in 9-11 Frolovskaya St. (block A, B) and built in 1986, along with the substation in the inner courtyard, the emergency wall of the pulled-down building in 35 Borichev Tok Street, block А. The historical monuments located at the address 41, 43/5 Borichev Tok Street will not be wrecked (demolition scheme is attached). Upon completing demolition works, we take the waste away from the site. The works on demolition and removal of debris will last for 3 weeks till 24 May. “All the buildings remaining at the site either have been demolished partially, or are in dangerous state. Therefore the matter of demolition completion is mandatory in terms of safety. We will do utmost of our power to make the demolition unnoticeable for the community and the visitors of the Andriyivsky Descent, – says Nikolay Nesterenko, ESTA Holding’s CEO. – It is very important for us to complete the works by the Day of Kyiv in order to convey the site to the archeologists on 1 June. In addition, we are negotiating

with the artists on holding a vernissage at our site devoted to the Day of Kyiv”. Within the scope of preparation for the final stage of demolition we consult with specialists of SE UkrNIIProektRestavratsyia research institute, representatives of Andriyivsky Descent community and historians, in particular with Mikhail Kalnitsky, Dmitry Shlyonsky and others. They confirmed that the buildings to be pulled down are neither monuments, nor of any historical value. “The buildings of the former “Yunost” factory in 9-11 Frolovskaya Street were built in the 80s of the XX century. I am sure that demolition of them will not be a great loss for the Andriyivsky Descent”, – says Dmitry Shlyonsky, Director of the One Street Museum. Moreover, as agreed with administration of the Koleso Theatre, all the works will be executed in the mode of the ‘lowest impact possible’ and the operation schedule will be coordinated with the time of the theatre performances. The community will be able to follow the demolition progress as live webcast on the website www.andreevskiy.com.ua

ESTA Holding to Attract Archeologists for the Works at Andriyivskyi Uzviz

ESTA Holding has signed a contract with Institute of Archeology of NAS of Ukraine on carrying out archeology excavations in the territory of the former Yunost factory. The Contract provides for full-scale archeological research at the entire site excluding the locations of buildings being historical monuments (41, 43/5 Borichev Tok Street). Archeologists’ work has initially been one of the phases of the site preparation and is a regulatory requirement of the legislation while executing construction and demolition works in the historical territories. The negotiations on these rather complicated researches have been held since last year. On 15 January 2012 the Provisional Contract was signed for the preparation period and agreement of various details and adjustments for the Principal Contract. “Despite refusal to build Andriyivskyi office center we decided not to postpone the work of the archeologists at this site, since it is required by law to perform archeological works in any variant of the project in this territory which is crucial for the city, – notes Nikolay Nesterenko, ESTA Holding’s CEO. – All the works will be carried out at the expense of ESTA Holding under control of community, municipal and state monument protection authorities”. The

archeologists started working as soon as snow thawed off. They carried out bibliographical and historic archival research of the site, its features, relief, etc., as well as the field survey. Demolition and evacuation of factory buildings and possible earthworks at various sites were supervised. The І-st phase (March-May) implies supervision over the earthworks and exploration survey, probing in order to determine priority of the sites research, actual state of cultural strata. The archeologists will commence the main phase on 1 June 2012. Total duration of the excavation works of this phase will make 3-4 months. Gleb Ivakin, famous historian, associate member of National Academy of Sciences of Ukraine, Doctor of Historical Sciences, is appointed the head of the group. “We are getting ready to enter the site on 1 June, however this requires ESTA Holding to complete demolition of buildings of the former Yunost factory located at Frolovska Street and clean the site from demolition waste by May 24, - declares Gleb Ivakin. – It is especially important that in this case, contrary to many others, the Customer understands the significance of this research and is personally interested in the thorough study of the site”.

The project of procedures for gathering and operation of the Expert council

The project of procedures for gathering and operation of the Expert council, which will determine an optimal designated purpose and requirements to the appearance of a building/buildings, which will be constructed on the site of the former factory “Yunost” The procedure of the Expert council operation The Expert council must answer two main questions: 1. What cultural designation of new space in the territory of the factory “Yunost” must be? 2. How should this space look like in the context of urban planning, architecture, history and philosophy of the city? It appears that the answers to these questions can be given by different experts – therefore I suggest to gather two rounds of the expert council. First round, which will likely consist of acknowledged authorities in culture, will render a decision on a designated purpose of the facility. Second round will render recommendations on appearance, number of storeys, style, the buildings’ volume as well as recommendations about what facades (and other valuable, from historical point of view, facilities of this site) must be preserved. It seems obvious that dedicated experts – city planners, architects, urbanists, historians, representatives of organizations, engaging in protection of cultural heritage – must be gathered in this Expert council round. The general public opinion about the membership of a professional body in both rounds of the council will be clear in the process of the council gathering which will be as transparent and public as practically possible. The optimal membership of the council round is 9-11 persons. A little number of people in a council round increases the extent of a personal responsibility of each of the experts for the taken decision and consequently – the quality of the decision. The optimal way to take a decision by each of the council rounds is consensus. Once again, because a consensus, provided transparent and public experts discussions, increases the extent of personal responsibility of an expert and, consequently, the quality of the taken decision. After both rounds of the council rendered the decisions, the development of an architectural project, which meets public requirements, can be started. The development process must also be transparent for the public. The procedure of gathering public opinion for determination of experts of first and second rounds of the council First round of the council: experts, which determine a designated purpose of the site Anyone who feels like taking a part in formation of an expert council is suggested to answer some questions. 1. The representatives of what professions, in your opinion, should be delegated the right to judge about what kind and designation space should be created in the territory of the former factory “Yunost”? 2. In your opinion, should international experts in this or that sphere of culture participate in the council, and if “yes”, then the representatives of what profession must these experts be? 3. Enumerate names of two experts, to whom you are ready to delegate the right to judge about the optimal designated purpose of the site (recommend two persons, who, from your point of view, must be included into first

round of the expert council). Second round of council: experts who determine requirement to the appearance of a building/buildings As the task of the second round experts is much more narrowly-specialized, they are suggested to be elected by the same way, but taking into account only the opinions of people, who directly concern the matter: historians, city planners, architects, urbanists, probably, artists and art historians (surely in the process of gathering opinions new ideas as for the persons who should participate in determination of experts names of the second round must appear). In such a way we’ll be able to guarantee that the council will consist of people, who are experts exactly by the opinion of their colleagues, and, correspondingly, the ones who have the highest professional level. Questions, which are suggested to be asked the mentioned persons: 1. The representatives of what professions in your opinion should be delegated the right to judge of how a cultural space which is created in the territory of the former factory “Yunost” will look like? 2. In your opinion, should international experts participate in the council, and if “yes”, then the representatives of what profession must these experts be? 3. Enumerate names of two experts, to whom you are ready to delegate the right to judge about the optimal appearance of new Kiev cultural space (recommend two persons, who, from your point of view, must be included into second round of the expert council). Requirements to an expert, who represents public interests in the expert council: 1. Strong experience in the field 2. Public good reputation of a high-skilled specialist 3. Fair name 4. Political indifference (expert may not represent any political force or intent to run for the Verkhovna Rada/ local councils for the next three years) 5. Conflict of interests absence (required from experts of the council’s second round) All vote participants are suggested to designate only two persons as it strongly increases the every participant’s level of personal responsibility for the vote. I will interview a part of the participants and provide recorder’s transcribing thereafter, if required. They are the very participants, who are mostly called experts while Internet voting and in consultations. Everyone interested can participate in the vote by answering the questions above per e-mail: andreevskiy.council@estaholding.com, or personally to Yuliia Filonenko in Facebook (https://www.facebook.com/j.filonenko) . Please, provide the information about your occupation, which is essential for apparent reasons. Moreover, we will check all the voted to find out, whether he/she is a real person and whether he/she voted one time, ensuring the relevancy of the vote. Names of those participated in the vote, as well as those, recommended by them to the experts council, will appear on the website http://www.andreevskiy.com.ua/#vision/ or on the Facebook page, dedicated to the council gathering.
Yours sincerely, Yuliia Filonenko

ESTA Holding to Introduce a Public Expert Council’s Coordinator of Andreyevsky Project

ESTA Holding introduced a public expert council’s coordinator of Andreyevsky Project - Yuliia Filonenko. She is a coordinator and organizing committee’s member of Kiev Fashion Park Project, being famous for its art-projects on Peizazhnaya Lane and in T.G. Shevchenko Park. Nikolay Nesterenko, ESTA Holding CEO claimed: ESTA Holding tends to create a representative and independent expert council, whose opinion the public will trust. Moreover, it is important for us to keep the council transparent and open. Therefore, we engaged Yuliia, whose experience, surely, enables us to deliver on the goal. KFP coordination of work, including the independent expert council meeting, competition procedures development and council

work, council voting organization are among the most famous projects of Yuliia. “I sincerely happy that ESTA Holding is inclined to make an open dialog with the public, otherwise someone else would be engaged to coordinate the project, noted Yuliia. I ask everyone, who is worried of Andriyivsky descent destiny, to help us to gather a really professional council, suggest your candidates, watch the process of gathering and ask me any questions on the topics that interest you. You can do it with the help of Facebook. In the near future the project coordinator will introduce the methodology of candidates selection for the public council.

ESTA Holding presented the follow-up upon the project on Andriyivsky Descent

ESTA Holding Company developed and presented a plan for further actions of space art project implementation in place of former factory "Yunost". The primary object of this plan is the clearest preparation of a new non-commercial project, as well as the conducting of all preparatory works. "We cancelled the construction of Andriyivsky business center. Today we are fully aware of the mistakes made, and the process of discussing the future functional of non-commercial object will be transparent and open as much as possible, - says ESTA Holding's CEO Nikolay Nesterenko. – We don’t ask people to calm down and move on, instead we ask them to help us create a public advisory council, which will determine what should appear in the place of former factory "Yunost" and also to monitor the project implementation upon creating a cultural space. So, the position of Kiev citizens and their active participation in this process are very important. And I want to reiterate again and assure that no new construction activity on the location will be undertaken, until the Council starts its work.” To ensure the transparency ESTA Holding Company provides the following: The Web-site of Art Space Project on Andriyivsky Descent: www.andreevskiy.com.ua . Temporary visiting web-site of project operates now where you can find information and contact form. Also in this web-site to the extent of formation of Advisory Council, will appear information about the members of Advisory Council and the results of voting, as well as archaeologists’ work at the location. 20 April 2012. The Webcam, which will broadcast continuously

on the Project web-site (the address of web-site see in item 1) everything that happens on the building site. 20 April 2012. The Forms of vote for possible project functional will be on the Project web-site, as well as in social networks. 23 April 2012. Advisory Council.

Defining the leader of the process of creating the Advisory Council. 23 April 2012.
Forming of the Council. 24 May 2012.
Signing the Memorandum between the Company and the Council. 1 June 2012.

The Company informs also on preparation to transfer the site to archaeologists, which will start excavations since 1 June 2012 under the direction of Gleb Ivankin, famous Ukrainian specialist. During preparation construction waste will be removed, and dismantling two buildings of the 70’s will be completed. Buildings addresses: 9-11 Frolovskaya St. Dismantling works, controlled by public, will be conducted in the safest mode for the Descent by 20 May. Other two buildings of historical value, located: 41 and 43/5 Borichev Tok St., will remain unchanged. Moreover, the Company notifies that from 24 May till 1 June, within the City Day celebration the site part will turn to the exhibition space, where painters of Kiev and Ukraine can expose their works. “It is of great importance to ensure so far that the site will not disturb the special spirit of Andriyivsky Descent, will fit in with its cultural and creative landscape. For this purpose we have supported the initiative of painters group to hold the vernisage on Kiev Day”, – noted Mr. Nesterenko.

ESTA Holding Initiates Public Council for Andriyivskyi Uzviz Project

ESTA Holding has invited Kiev citizens to establish a council that will contribute to development of a concept for a cultural centre in Andriyivskyi Uzviz, says the company's CEO Nikolay Nesterenko. "We've learned the lessons and are now absolutely determined to decide only in consultations with the public in Kiev what project to realise in place of the former factory Yunost. To this end we are initiating a public council that will transparently and openly discuss all alternative projects and approve the one supported by Kiev

citizens. We hope that opinion formers and NGO leaders will be involved extensively in establishment and activities of the public council," noted Nikolay Nesterenko. "Our goal is to create a project that would echo the traditional style of Andriyivskyi Uzviz and preserve its historic and cultural atmosphere," ESTA Holding's CEO underscored. "I am confident that in cooperation with Kiev citizens we will build a centre that will be a pride not only for the capital, but for the whole country as well."

Rinat Akhmetov's Position on Andriyivskyi Uzviz

Andriyivskyi Uzviz is a symbol of Kiev and its history, and I thank everybody who expressed their concerns over the problem. Having studied the opinion of Kiev citizens, ESTA decided not to build a business centre as far back as March 2012. Unfortunately, two gross mistakes were made after the decision. First, the company did

not coordinate its actions. Second, it did not explain the actions to the public. Therefore, SCM's underlying principles - openness and transparency - have been violated. I promise that SCM will restore the original features of the demolished facades. Moreover, we will help the city to reconstruct Andriyivskyi Uzviz. Rinat Akhmetov

ESTA Holding CEO Nikolay Nesterenko Posts About the Project in Andriyivskyi Uzviz

I find it important to write this post to answer the questions on ESTA's project being implemented at Andriyivskyi Uzviz. We bought this land plot located at 9-11 Frolovskaya street and 35 Borichev Tok street with old buildings of former Yunost garment factory from a French company in 2008. At that time we planned to build a multi-storied business center on the site. The garment factory was built in the 1980s. Most of its buildings were unsafe partly after the fire several years ago. The decision to demolish them was made after we had obtained all the permits. I would like to emphasize that every our step was legal and we obtained the required permits for all our actions (Order of Kiev City State Administration, letter of approval from the State Architecture and Construction Inspection in Kiev).We are liable for the site, the land plot and life of the people walking around. We started demolishing the most unsafe buildings to avoid accidents. Some of the buildings might have looked safe outside though. What I want to communicate to each Kiev citizen and each guest of the capital is that we will restore the original features of facades of Andriyivskyi Uzviz to preserve the historic view of the site whatever we build behind the facade. This is our philosophy. We did the same with all the property located in the historic centers: Donbass Palace hotel in Donetsk, Opera Hotel in Kiev and Kiev Central Mall TSUM. The practice is the same everywhere in the world. We can do this and we guarantee this. I would like to underline that the information about demolishing of the building located at 10-A, Andriyivskyi Uzviz is not true. We have never owned the

building and it is not a part of Yunost factory. Moreover, the building is still on its place, you can go and see the number plate. As Yandex map is not completely correct you can check with the BTI map used to issue any city planning decision. Since 2008 we've been working on the project trying to fit it into the style of Andriyivskyi Uzviz. We studied the best world practices and specific projects in Europe where historic parts of the city were combined with structures of different times and various architectural styles. We engaged national and international architects. Early this year we started discussing the project in cultural and architectural communities and with the city citizens and local authorities. As far back as last year we published the draft design of the project and its description on the website of ESTA trying to make the discussions more specific. We received negative initial reaction from Kiev citizens despite our desire to create an art space in the part of the building overlooking Andriyivskyi Uzviz. In February we made an internal decision to discuss with the city public an alternative to the office center: if the public is against changing the view of Andriyivskyi Uzviz what can we build on the site? The reply was clear: the facility should preserve the integral view of Andriyivskyi Uzviz and have a cultural value. As a result instead of the business centre we decided to create an art space on the territory of former Yunost factory. The presentation of the possible art space concept was scheduled for the end of April. Today I want to give a new date. It is 24 May, a little later than originally planned. Before the presentation we will be glad to hold any necessary public discussions.

Official position of ESTA Holding On Construction Works in Andriyivskyi Uzviz in Kiev

ESTA Holding is a transparent company working in the legal environment. The company's projects do not affect historic and cultural property. ESTA Holding takes every effort to preserve the original form of all the property that have an aethetic value. This is clearly demonstarted by successful projects of ESTA Holding: Donbass Palance hotel in Donetsk and TSUM (Kiev Central Mall) in Kiev, which retained their original appearance. Not a single architectural monument was damaged during preparations at Andriyivskyi Uzviz including the building located at 10-A, Andriyivskyi Uzviz. This information is confirmed by official data of the Bureau of Technical Inventory (BTI) and the Register of Cultural Heritage of Kyiv City Council (BTI). The buildings under reconstruction at Andriyivskyi Uzviz do not present any historic value. In particular, this is an unsafe building built in 1970s

and located at the corner of Frolovskaya street and Andriyivskyi Uzviz.ESTA Holding will reconstruct the building to retain all original features of Andriyivskyi Uzviz evironment as it understands the necessity to preserve the historic area of the city. All preparatory works at Andriyivskyi Uzviz have been permitted by Kiev authorities, comply with the schedule, the design documents and the land registration documents. At the same time ESTA Holding continues negotiations with Kyiv authorities to review the construction plan of business center. We propose to construct an art space, which will fit well into Andriyivskyi Uzviz. We invite all the parties concerned about the future of Andriyivskyi Uzviz to participate in development of the project. Construction works will begin after the public hearings and public approval of the art center in Andriyivskyi Uzviz in order to take into account the interests of all the stakehodlers.