ELBIT IMAGING ANNOUNCES RECEIVING WARRANTY CLAIM IN CONNECTION WITH THE PREVIOUS SALE OF ITS RIGHTS IN THE RADISSON HOTEL COM...
April 02 2019 - 7:08AM
Elbit Imaging Ltd. (“EI” or the “Company”) (TASE, NASDAQ:
EMITF) announced today that it has received a warranty
claim in connection with the previous sale of its rights in the
Radisson Hotel complex in Bucharest, Romania.
As previously disclosed, in December 2017 a
wholly owned indirect subsidiary of the Company (the
"Subsidiary") completed the sale of its holdings
in an SPV that holds the Radisson Hotel complex in Bucharest,
Romania (the "Agreement"), for a total net
consideration of approximately €81 million (based on a property
value of €169.2 million) (the
"Consideration").
The Company has now received a notice from the
purchaser claiming that it is entitled to indemnification in the
amount of approximately €3 million, due to the alleged breach of
certain warranties made by the Subsidiary in the Agreement (the
"Notice"). In the Notice the purchaser has
informed the Company that it has submitted claims under the
policies of Warranty & Indemnity Insurance and Title Insurance
taken out in terms of the Agreement, which provides that where loss
arising from a warranty claim may reasonably be anticipated to be
covered by such insurance policies, the purchaser will firstly
attempt to recover such loss out of the proceeds paid out under
such policies. The Company is currently examining the Notice with
its legal advisors. After a preliminary review of the Notice, the
Company believes that the warranty claims are without merit and
intends to vigorously contest same.
It should be noted that part of the
Consideration in an amount equal to €8 million was used to finance
a loan from the Subsidiary granted to the purchaser and due to be
paid after three years (the "Vendor Loan"). The
right to the repayment of the Vendor Loan serves as collateral for
customary post-closing liabilities, including an undertaking to
indemnify the purchaser in the event of a breach of representations
and / or warranties in the Agreement.
About Elbit Imaging Ltd.
Elbit Imaging Ltd. operates in the following
principal fields of business: (i) medical industries through our
indirect holdings in Insightec Ltd. and Gamida Cell Ltd.; and (ii)
land in India which is designated for sale (and which was initially
designated for residential projects).
For Further
Information:Company ContactRon
HadassiCEO and Chairman of the Board of DirectorsTel:
+972-3-608-6048Fax: +972-3-608-6050ron@elbitimaging.com