Orco launched long awaited capital increase yesterday. Company plans to place 1,304,348 new shares with additional 15% greenshoe option guarantee. Yesterday closing price indicate capital increase approximately in the amount of EUR 160m. Proceeds should be used for further expansion in CEE and SEE region. The pricing of the capital increase should be announced on 14 June, with maximum price to be highest euro or euro equivalent final quoted stock price on pricing date of the shares on Euronext or Prague Stock Exchange. As announced previously jointly with the capital increase Orco will list its shares on Warsaw and Budapest Stock Exchange. Our view: Orco communicated its plans to raise some EUR 100m in 1H2007 together with listing on Warsaw and Budapest Stock Exchange already at the end of last year. Although the amount that could be raised is somewhat higher and is between Orco’s first indications and previous rumours of up to EUR 200m, we see this news as neutral. Number of shares to be place among investors represent 15.0% of current number of outstanding shares and 17.3% should the greenshoe option is exercised. Based on pricing of recent Immoeast SPO, which came at 15% premium, we believe that some 20% premium to Orco’s 2006A NAV of EUR 99.4 per share is justified based on higher exposure to development segment.