TIDMPLAZ
RNS Number : 3312Y
Plaza Centers N.V.
20 August 2018
20 August 2018
PLAZA CENTERS N.V.
RESULTS FOR THE SIX MONTHSED 30 JUNE 2018
Plaza Centers N.V. ("Plaza" / "Company" / "Group") today
announces its results for the six months ended 30 June 2018.
Financial highlights:
-- Reduction in total assets to EUR89.7 million as a result of
the Company's deleveraging including principal repayments and the
redemption in full of Series of bonds issued in Poland to the
amount of EUR40 million (31 December 2017: EUR141 million)
-- Book value of the Company's Trading properties at 30 June
2018 was EUR70.2 million (30 December 2017: EUR73.6 million) due to
a EUR 3.4 million write-down of Trading properties in Poland,
Greece, Romania and Serbia
-- Consolidated cash position as at 30 June 2018 (including
restricted bank deposits) decreased to EUR1.2 million (31 December
2017: EUR44.8 million) and current cash position of circa EUR1.22
million
-- Recorded loss of EUR9.8 million (30 June 2017: EUR6.8
million) as no further disposals took place during the period.
Losses are mainly due to finance expenses and the write-down of
Trading properties
-- Basic and diluted loss per share of EUR1.43 (30 June 2017: loss per share of EUR0.99)
-- Gearing increased to 100.9% (31 December 2017: 94%) mainly
due to finance costs and write downs
Material events during the period:
Settlement agreement with the Bondholders:
In January 2018, a settlement agreement was reached and approved
(and all the conditions precedent in the agreement fulfilled)
between the holders of two Series of Israeli Bonds and the Company
regarding the allocation of funds, to be repaid by the Company,
across the Israeli Bonds Series. As a result, the Series A
Bondholders withdrew their request for immediate repayment.
Retirement of Chief Executive Officer:
On 11 January 2018, the Company announced that the CEO, Dori
Keren, would retire from his position at the end of March 2018. The
Board of Directors appointed Avi Hakhamov, who has been with the
Company for more than 11 years, as Acting CEO commencing 1 April
2018.
Earn-out payment for the sale of Torun:
In June 2018, the Company received the earn-out payment for the
sale of Torun Plaza totalling EUR0.35 million, reduced by NAV
adjustment of EUR0.14 million.
Sale agreement of plot in India:
In January 2018, the Purchaser of the 100% interest in an SPV
(in which Plaza holds a 50% stake with its joint venture partner,
Elbit Imaging Ltd.), that holds property in Bangalore, India, (the
"Agreement" and the "Purchaser" respectively), gave notice that all
remaining payments under the Agreement will be stopped until a
mutually acceptable solution is reached due to a proposed change
(initiated by the Indian authorities) which could potentially
impact the development of the land. In February 2018, despite the
notice above, the Purchaser paid the January instalment totalling
INR 5 Crores (circa EUR0.65 million).
In March 2018, the Company and the Purchaser signed an amended
revised agreement as follows: The Purchaser and EPI agreed that the
total purchase price shall be increased to INR 350 Crores
(approximately EUR43.8 million; of which the Company's share is
approximately EUR21.9 million). Following the signing of the
revised agreement the Purchaser paid EPI an additional INR 22.5
Crores (approximately EUR2.8 million; of which the Company's share
is approximately EUR1.4 million) further to the INR 45 Crores
(approximately EUR5.6 million; of which the Company's share is
approximately EUR2.8 million) that was already paid during the
previous year.
An additional INR 70.5 Crores (approximately EUR8.8 million; of
which the Company's share is approximately EUR4.4 million) will be
paid by the Purchaser in unequal monthly instalments until the
Final Closing. The Final Closing will take place on 31 August 2019
when the final instalment of INR 212 Crores (approximately EUR26.5
million; of which the Company's share is approximately EUR13.25
million) will be paid to EPI against the transfer of the
outstanding share capital of the SPV.
If the Purchaser defaults before the Final Closing, EPI is
entitled to forfeit certain amounts paid by the Purchaser as
stipulated in the revised agreement. All other existing Securities
granted to EPI under the previous agreements will remain in place
until the Final Closing.
Redemption of the Polish Bonds:
In May 2018, further to the decision of the Israeli Series A and
Series B Bondholders, the Company redeemed in full the series of
bonds issued in Poland at their principal amount together with
interest accrued to the maturity date. Upon completion of the
redemption, the Company will have no outstanding bonds issued in
Poland.
Claim in Greece:
In May 2018, a third party filed a legal claim in the court of
Greece against Helios Plaza AE ("HP"), a wholly owned subsidiary of
Plaza which holds land property in Athens ("Land Property"). The
claimant is pursuing HP for a EUR2.96 million sum, based on an
agreement that is alleged to have been agreed in 2010, and has also
filed a request for an injunction with respect to the Land Property
in order to secure its claim. In June 2018, the injunction was
granted until a final decision regarding the main dispute is
reached. At this preliminary stage, the Company and its legal
advisors are unable to estimate the probability of the claim and
its possible implication, if any.
Due to these new circumstances the sale of the Land Property has
been put on hold, and the Company is discussing options with the
existing potential buyer.
The Company recorded a write-down of EUR1.15 million on the
property, which reflects expected transaction costs.
Motion to reveal and review internal documents:
In March 2018, a Shareholder of the Company filed a motion with
the Financial Department of the District Court in Tel-Aviv to
reveal and review internal documents of the Company and of Elbit
Imaging Ltd., with respect to the events surrounding certain
agreements signed in connection with the Casa Radio Project in
Romania and the sale of the US portfolio. Such events were
previously announced by the Company and are detailed in notes 8(6)
and 27(d) in the annual financial statement as of 31 December 2017.
In July 2018, the Company filed a response to the relevant
court.
Key highlights since the period end:
Chennai, India:
In July 2018, Elbit Plaza India Real Estate Holdings Limited
("EPI") signed a term sheet with its local partner (the "Buyer"),
relating to the sale of EPI's Indian subsidiary ("SPV") that holds
74.7 acre plot in Chennai, India ("Term Sheet"). Under the terms of
the Term Sheet, the Buyer shall have 60 days to conduct due
diligence only with respect to the SPV, following which definitive
agreements, for the sale of the SPV in consideration for INR 110
Crores (approximately EUR13.75 million; of which the Company's
share is approximately EUR6.8 million) (subject to adjustment with
respect to the previous deposit that was placed and the existing
cash in the SPV level), shall be signed and closing shall take
place on the same day.
A request to reveal documents
An indirect subsidiary of the Group in Romania (which holds a
plot of land outside Bucharest) received a request from the
Romanian authorities to reveal documents from the period 2007-2011
as part of an ongoing investigation into procedures during those
years. The Company is unaware of the subject of the investigation
or any illegal acts or irregularities that may have prompted the
investigation.
Lodz Centrum Plaza:
In July 2018, a subsidiary of the Company signed a preliminary
agreement with respect to the sale of the land plot known as "Lodz
Centrum Plaza", for a consideration of PLN 1.3 million. The
agreement is conditional upon the pre-emptive right of the
municipality of Lodz.
Commenting on the results, acting CEO Avi Hakhamov, said:
"Our active focus has continued to centre on asset disposals and
the optimisation of the business with the aim of satisfying our
obligations to our stakeholders. This remains our absolute priority
for the second of half of the year."
For further details, please contact:
Plaza
Avi Hakhamov, acting CEO + 361 6104523
FTI Consulting
Dido Laurimore / Claire Turvey / Tom
Gough +44 (0)20 3727 1000
Notes to Editors
Plaza Centers N.V. (www.plazacenters.com) is an emerging markets
developer of shopping and entertainment centres. The Company is
listed on the Main Board of the London Stock Exchange, as of 19
October 2007, on the Warsaw Stock Exchange (LSE: "PLAZ", WSE:
"PLZ/PLAZACNTR") and, on the Tel Aviv Stock Exchange. Plaza Centers
N.V. is an indirect subsidiary of Elbit Imaging Ltd. ("EI"), an
Israeli public company whose shares are traded on both the Tel Aviv
Stock Exchange in Israel and on the NASDAQ Global Market in the
United States.
Forward-looking statements
This press release may contain forward-looking statements with
respect to Plaza Centers N.V. future (financial) performance and
position. Such statements are based on current expectations,
estimates and projections of Plaza Centers N.V. and information
currently available to the company. Plaza Centers N.V. cautions
readers that such statements involve certain risks and
uncertainties that are difficult to predict and therefore it should
be understood that many factors can cause actual performance and
position to differ materially from these statements. Plaza Centers
N.V. has no obligation to update the statements contained in this
press release, unless required by law.
MANAGEMENT STATEMENT
During the first half of 2018 we have made additional progress,
albeit at a reduced rate, as we seek to substantially deleverage
the business and sell liquid plots of land. This disposal process
is evidenced by the minor earn-out payments received for the sale
of Torun Plaza.
Book value of the Company's Trading properties has reduced to
EUR70.2 million due to the write-down of assets in Poland, Greece,
Romania and Serbia.
The ongoing portfolio rationalisation activity means the Company
now has investments in nine assets, two of which are in India and
the remainder sit within Central and Eastern Europe.
The Company has been in discussions with potential purchasers
with regard to several of its land plots. Looking ahead, we have
more disposals agreed and further disposals identified.
Results
During the first half of the year, Plaza recorded a EUR9.8
million loss. This increase compared to the losses reported in the
first half of 2017 (EUR6.8 million) is attributable mainly to a
write-down of trading properties to the amount of EUR3.4 million in
respect of plots in Lodz (Poland), Helios Plaza (Greece), Krusevac
(Serbia) and Brasov (Romania).
The consolidated cash position as at 30 June 2018 (including
restricted bank deposits) was EUR1.2 million (31 December 2017:
EUR44.8 million) and the current cash position is circa EUR1.22
million.
Portfolio progress
The Company's portfolio of nine assets as at 20 August 2018 is
located across Central and Eastern Europe and India. The full
details are as follows:
Number of assets (CEE
and India)
Location
----------------------
Romania 3
----------------------
India 2
----------------------
Poland 2
----------------------
Serbia 1
----------------------
Greece 1
----------------------
Total 9
----------------------
Liquidity & Financing
Plaza ended the period with a consolidated cash position
(including restricted bank deposits) of EUR1.2 million, compared to
EUR44.8 million at the end of 2017.
As at June 30 2018 the Group's outstanding obligations to
bondholders total EUR81 million.
Information concerning the Group's obligations and commitments
to make future payments under contracts, such as debt agreements in
the 18 months starting 1 July 2018, is aggregated in the following
table.
Total Payment Due by
period
(in TEUR)
------------------------
Liquidity Requirements Within Within 1-1.5
1 year year
------------------------------------ --------- -------------
Bonds including current portion and
interest 54,400 8,200
General & administrative (**) 2,400 1,000
--------- -------------
Total liquidity requirements 56,800 9,200
Total Sources (*) 16,000 9,700
--------- -------------
Total surplus (deficit) (40,800) 500
--------- -------------
(*) The Company expects to increase the amount of its liquid
balances during the 18 months starting July 1, 2018, through the
sale of land plots (including in India) and other assets.
(**) Including estimated costs of Plots maintenance.
The Board and Management estimate that there are significant
doubts regarding the Company's ability to serve its entire debt
according to the current repayment schedule. Moreover, following
the new payment structure for the sale of the project in Bangalore,
India (refer to Note 7(e)), it is expected that the Company will
not be able to meet its entire contractual obligations in the next
12 months.
As of 30 June 2018, the Company is not in compliance with the
Coverage Ratio Covenant ("CRC") as defined in the restructuring
plan. This may entitle the bondholders to declare that all or a
part of their respective (remaining) claims become immediately due
and payable.
On 18 January 2018, S&P Maalot announced that it had ceased
updating its rating of the Company's bonds at the Company's
request.
Strategy and Outlook
Plaza's main focus is on its portfolio disposal programme with
the aim of meeting the obligations to our bondholders, followed by
material cost-cutting.
OPERATIONAL REVIEW
Over the course of the year to date, Plaza has continued to make
progress against its operational and strategic objectives. The
status of the nine projects is outlined in the table below.
The Company's current assets are summarised in the table
below:
Asset/Project Location Nature of asset Size Plaza's
sqm (GLA) effective
ownership
%
Mixed-use retail, 467,000 (GBA
Bucharest, hotel and leisure including
Casa Radio Romania plus office scheme parking spaces) 75
-------------- ------------------------ ----------------- -----------
Chennai,
Chennai (1) India Residential Scheme 302,400 (GLA) 50
-------------- ------------------------ ----------------- -----------
Plot Size
(sqm)
-------------- ------------------------ ----------------- -----------
Lodz Plaza Retail & entertainment
(2) Lodz, Poland scheme 61,500 100
-------------- ------------------------ ----------------- -----------
Lodz (Residential)
(3) Lodz, Poland Residential scheme 4,000 100
-------------- ------------------------ ----------------- -----------
Miercurea
Ciuc, Retail & entertainment
Csiki Plaza Romania scheme 36,500 100
-------------- ------------------------ ----------------- -----------
Brasov, Retail & entertainment
Brasov Romania scheme 67,000 100
-------------- ------------------------ ----------------- -----------
Krusevac, Retail & entertainment
Krusevac Serbia scheme 19,930 100
-------------- ------------------------ ----------------- -----------
Athens,
Piraeus Plaza Greece Retail/Offices 15,000 100
-------------- ------------------------ ----------------- -----------
Bangalore Bangalore,
(4) India Residential Scheme 218,500 25
-------------- ------------------------ ----------------- -----------
(1) A term sheet for the sale of the SPV was signed in July
2018.
(2) A preliminary sale agreement was signed in June 2017
(representing 22% of this holding)
(3) A Preliminary agreement signed in July 2018. Final agreement
expected to be signed in the following weeks.
(4) An amended revised sale agreement of the SPV was signed in
March 2018.
FINANCIAL REVIEW
Results
Revenue for the period derived from proceeds received from the
disposal of Trading properties amounted to EUR0.2 million, compared
to EUR67 million in the first half of 2017. The reduced income
level is attributable to the subsequent price adjustment of the
Torun Plaza (Poland) transaction.
Administrative expenses decreased from EUR3.6 million in the
first half of 2017 to EUR1.5 million as result of a material scale
down of the Company's activities, mainly in respect of salaries and
related expenses and professional services.
Finance income decreased to EUR0.1 million from EUR0.4 million
in the first 6 months of 2017 due to foreign exchange
movements.
Finance costs decreased from EUR11 million to EUR4.4 million (30
June 2017 and 30 June 2018, respectively). The main components of
the costs were:
-- Foreign exchange movements (NIS-EUR) - the effect on the
debentures totalled EUR2.7 million in expenses (30 June 2017 -
EUR4.3 million expense).
-- Interest expenses booked on all series of bonds totalled EUR3
million (30 June 2017 - EUR6.2 million expenses recorded).
-- EUR1.3 million income (non-cash) recorded associated with
amortization of discount on debentures (30 June 2017 - EUR0.5
million expense) including Implementation of IFRS 9.
As a result, the loss for the period amounted to circa EUR9.8
million in H1 2018, representing a basic and diluted loss per share
for the period of EUR1.43 (H1 2017: EUR0.99 loss).
Balance sheet and cash flow
The balance sheet as at 30 June 2018 showed total assets of
EUR89.7 million compared to total assets of EUR141 million at the
end of 2017, largely as a result of the implementation of the debt
reduction strategy including the settlement agreement with
bondholders recorded in January 2018.
Plaza's consolidated cash position as at 30 June 2018 (including
restricted bank deposits) decreased to EUR1.2 million (31 December
2017: EUR45 million) and the current cash position is circa EUR1.22
million.
The value of the Company's trading properties decreased from
EUR73.6 million as at 31 December 2017 to EUR70.2 million at the
end of 30 June 2018 resulting from a write-down of trading
properties.
Investments in equity accounted investee companies decreased to
EUR16.2 million (31 December 2017 EUR19.5 million) as a result of
foreign exchange rate losses (EUR0.8 million), repatriation of
capital (EUR2.1 million) and equity losses mainly due to impairment
(EUR0.4 million).
Plaza has a balance sheet liability of EUR76 million (with an
adjusted par value of circa EUR81 million) from issuing bonds on
the Tel Aviv Stock Exchange. These bonds are presented at amortised
cost under current liabilities.
Liabilities include a provision with respect to the obligation
connected to Casa Radio project (Bucharest Romania) in an amount of
EUR12.8 million.
The main changes in the cash flow are attributable to interest
paid for all series of bonds including consent fee (EUR3 million),
repayment of principal of bonds (EUR40 million) including full
redemption of Polish bonds and instalments received from sale of
Bangalore project (EUR2.1 million).
PLAZA CENTERS N.V. -STATEMENT AS PER SECTION 2:362 PARA 6 OF THE
DUTCH
CIVIL CODE IN RESPECT OF THE ANNUAL ACCOUNTS 2016
Plaza Centers N.V. (the "Company") wishes to announce as
follows:
After completion of the audit of the statutory financial
statements for the year ended 31 December 2016, it appeared that
certain decisions made when preparing these statutory financial
statements were susceptible to discussion.
After the Company had a discussion with its auditors, Ernst
& Young Israel, in respect of the 2016 IFRS financial
statements (not being the 2016 statutory financial statements) the
Company made the decision to reissue and replace the 2016 IFRS
financial statements that were originally approved by the Board of
Directors in May 2017. Therewith, the reasons for reissuance and
certain adjustments (including error corrections) made in these
financial statements were described. The restated 2016 IFRS
financial statements were approved by the Board of Directors
in October 2017.
The statutory financial statements for 2016, that were adopted
by the Company's general meeting of shareholders on 31 July 2017,
have not been amended.
After nominating Baker Tilly Berk Accountants B.V. as statutory
auditors, the Company decided to restate and reclassify the
comparative figures in the 2017 statutory consolidated financial
statements in order to match with the restated 2016 IFRS financial
statements.
The Company's 2017 statutory consolidated financial statements
are available on the Company's website www.plazacenters.com. For
readers of the 2017 statutory consolidated financial statements,
the Company specifically makes reference to notes 2(f) and 2(g)
thereof and to note 20 to the company (standalone) financial
statements for the year 2017, which are reflected in the Appendix
hereto ("Quote from Statutory financial statements for the year
ended December 31, 2017). The 2017 statutory financial statements
(comprising consolidated financial statements and the standalone
financial statements) were adopted by the Company's general meeting
of shareholders on 14 June 2018.
Disclosure in accordance with Regulation 10(B)14 of the Israeli
Securities Regulations (periodic and immediate reports),
5730-1970
1. General Background
According to the abovementioned regulation, upon existence of
warning signs as defined in the regulation, the Company is obliged
to attach its report's projected cash flow for a period of two
years, commencing with the date of approval of the reports
("Projected Cash Flow").
The Material uncertainty related to going concern was included
in view of the Management's plans for asset disposals and also in
respect of material uncertainty related to the Casa Radio project,
as described in Notes 4, 6 of these reviewed condensed consolidated
Financial Statements in this announcement.
Upon having such warning signs, the Company is required to
provide projected cash flow for the period of 24 months following
the reporting period, and also provide explanations on differences
between previously disclosed estimated projected cash flows with
actual cash flows.
2. Projected cash flow
The Company has implemented the restructuring plan that was
approved by the Dutch court on July 9, 2014 (the "Restructuring
Plan"). Under the Restructuring Plan, principal payments under the
bonds issued by the Company and originally due in the years 2013 to
2015 were deferred for a period of four and a half years, and
principal payments originally due in 2016 and 2017 were deferred
for a period of one year.
The Restructuring Plan further provided that, if the Company
does not prepay an aggregate amount of at least NIS 434 million
(EUR107.3 million) on the principal of the bonds on or before
December 1, 2016 (the "Early Prepayment"), the principal payments
due under the Extended Repayment Schedule will be advanced by one
year (the "Accelerated Repayment Schedule"). On November 29, 2016,
the Company's bondholders approved a postponement of the Early
Prepayment date by up to four months and the reduction of the total
amount of the required Early Prepayments to at least NIS 382
million (EUR94.5 million) (a reduction of 12% on the original
amount). In addition, the Company agreed to pay to its bondholders,
on 31 March 2018, a one-time consent fee (which is equal to 0.25%
from the Company's outstanding debt under the bonds at that time).
The consent Fee was paid to the Company's bondholders on a pro rata
basis.
During first three months 2017, the Company paid to its
bondholders a total amount of NIS 199.2 million (EUR51 million) as
an early redemption. Upon such payments, the Company complied with
the Early Prepayment Term (early redemption at the total sum of at
least NIS 382,000,000) and thus obtained a deferral of one year for
the remaining contractual obligations of the bonds.
In January 2018, a settlement agreement was signed by the
Company and the two Israeli Series of Bonds. In the Settlement
Agreement it was agreed, inter alia, to approve:
-- New repayment ratios between the two Israeli Series of Bonds
(new ratio: Bond A- 39% Bond B- 61%);
-- An increase in the level of the mandatory early repayments
from 75% to 78% of the relevant net income;
-- New repayment schedule;
-- An increase in the compensation to be paid to the Bondholders
in the event of successful disposal of Casa Radio Project;
-- A waiver of claims to the Company and its directors and officers; and
-- To waive the request for publication of quarterly financial reports by the Company.
These conditions are included in the forecast.
The materialisation, occurrence consummation and execution of
the events and transactions and of the Assumptions on which the
projected cash flow is based, including with respect to the
proceeds and timing thereof, although probable, are not certain and
are subject to factors beyond the Company's control as well as to
the consents and approvals of third parties and certain risks
factors. Therefore, delays in the realisation of the Company's
assets and investments or realisation at a lower price than
expected by the Company, as well as any other deviation from the
Company's Assumptions (such as additional expenses due to
suspension of trading, delay in submitting the statutory reports
etc.), could have an adverse effect on the Company's cash flow and
the Company's ability to service its indebtedness in a timely
manner.
H2/2018 2019 H1/2020
Cash - Opening Balance 1.2 -5.4 -39.1
Proceeds from selling trading properties (1) 10.4 15.4 28.0
Total Sources 11.6 10.0 -11.0
Bonds - principle 12.9 43.7 11.4
Bonds - interest (2) 2.7 3.2 1.8
Operational expenses 1.3 2.1 0.6
Total Uses 16.9 49.1 13.9
Cash - Closing Balance -5.4 -39.1 -24.9
1. Including: Riga Plaza (price adjustments), Miercuera Ciuc,
part of Casa Radio (EUR25 million) and Brasov plot in Romania, Lodz
residential and Lodz Mall plots in Poland, Krusevac plot in Serbia,
Bangalore and Chennai in India. In addition price adjustment in
Belgrade Plaza (EUR1 million) is expected in 2018 and additional
EUR1.8 million are estimated until 2020 depending on the mall's
operational results improvement.
2. Including EUR1.5 million compensation to Bondholders related
to sale of Casa Radio in H2/2020.
3. Assuming EUR/NIS rate of 4.20. The repayment schedule takes
into consideration that in the case of adisposal of an asset, 78%
of the proceeds are used for the early prepayment of the bonds in
accordance with the terms of the Amended Restructuring Plan.
Below is a summary table of the comparison between forecasted
and actual cash flows, with explanations on the differences
published for the 6-month period ending 30 June 2018.
Forecast Actual
H1/2018 H1/2018
Cash - Opening Balance 44.8 44.8
Proceeds from selling trading and properties
and Indian projects (1) 3.2 2.0
Total Sources 48.0 46.8
Cash outflow from operating activity
Administrative expenses 1.6 1.4
Cash outflow from financing activity
Principal repayment to bondholders 40.9 40.9
Interest repayment to bondholders (2) 3.3 3.3
Total Uses 45.8 45.6
Cash - Closing Balance 2.1 1.2
1 Forecast included proceeds from Riga (EUR0.15 m), Torun Plaza
Price Adjustment (EUR0.15 m), Bangalore (EUR1.45 m) and Kochi
Advance (EUR1.4 m). Actual included proceeds from Riga (EUR0.15 m),
Torun Plaza Price Adjustment (EUR0.2 m), Bangalore (EUR1.45 m) and
reimbursement of costs related to Kragujevac project (EUR0.225
m).
2 Including EUR0.2 million compensation to Bondholders.
Avi Hakhamov
Acting CEO
20 August 2018
PLAZA CENTERS N.V.
CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS OF JUNE 30, 2018
INDEX
Report on Review of Condensed Interim Consolidated Financial
Statements
Condensed Interim Consolidated Statements of Financial
Position
Condensed Interim Consolidated Statements of Profit or
Loss
Condensed Interim Consolidated Statements of Comprehensive
Income
Condensed Interim Consolidated Statements of Changes
in Equity
Condensed Interim Consolidated Statements of Cash Flows
Notes to Condensed Interim Consolidated Financial Statements
- - - - - - - - - - -
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL
POSITION
December
June 30, 31,
2018 2017
---------- --------
Unaudited Audited
---------- --------
Euros in thousands
--------------------
ASSETS
Cash and cash equivalents 1,248 44,844
Other receivables 291 670
Related parties' receivables 1,776 -
Prepayments - 131
---------- --------
Total current assets 3,315 45,645
---------- --------
Trading properties 70,168 73,569
Equity accounted investees 16,212 19,530
Property and equipment 24 178
Related parties' receivables - 1,753
Total non-current assets 86,404 95,030
---------- --------
Total assets 89,719 140,675
========== ========
The accompanying notes are an integral part of the condensed
interim consolidated financial statements.
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL
POSITION
December
June 30, 31,
2018 2017
--------- ---------
Unaudited Audited
--------- ---------
Euros in thousands
--------------------
LIABILITIES AND EQUITY
LIABILITIES AND SHAREHOLDERS' EQUITY
Bonds at amortized cost 76,061 116,914
Trade payables 103 584
Related parties' liabilities 16 87
Other liabilities 1,504 1,878
--------- ---------
Total current liabilities 77,684 119,463
--------- ---------
Provisions 12,849 12,849
Total non-current liabilities 12,849 12,849
--------- ---------
Share capital 6,856 6,856
Translation reserve (29,605) (28,800)
Other reserves (19,983) (19,983)
Share based payment reserve 35,376 35,376
Share premium 282,596 282,596
Retained losses (276,054) (267,682)
--------- ---------
Total equity (814) 8,363
--------- ---------
Total equity and liabilities 89,719 140,675
========= =========
The accompanying notes are an integral part of the condensed
interim consolidated financial statements.
August 20, 2018
--------------------- ---------------------- -----------------------
Avi Hakhamov David Dekel
Date of approval of Acting Chief Executive
the Officer Director and Chairman
financial statements of the Audit Committee
CONDENSED INTERIM CONSOLIDATED STATAEMENTS OF PROFIT OR LOSS
Six months ended
June 30,
--------------------------
2018 2017
------------ ------------
Unaudited
--------------------------
Euros in thousands
(except per share data)
--------------------------
Revenues and gains
Revenue from disposal of trading properties 210 67,159
------------ ------------
Total revenues 210 67,159
Gains and other
Rental income - 4,554
Other income 237 611
------------ ------------
Total gains 237 5,165
------------ ------------
Total revenues and gains 447 72,324
------------ ------------
Expenses and losses
Cost of trading properties disposed - (62,733)
Cost of operations (128) (1,759)
Write-down of trading properties (3,401) (464)
Share in results of equity-accounted investees (397) (170)
Administrative expenses (1,485) (3,612)
Other expenses (520) (34)
------------ ------------
Finance income 144 428
Finance costs (4,430) (11,072)
------------ ------------
(10,217) (79,416)
------------ ------------
Loss before income tax (9,770) (7,092)
Tax benefit (Income tax expense) (1) 314
------------ ------------
Loss for the period (9,771) (6,778)
============ ============
Earnings per share
Basic and diluted loss per share (EUR) (1.43) (0.99)
============ ============
The accompanying notes are an integral part of the condensed
interim consolidated financial statements.
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE
INCOME
Six months ended
June 30,
--------------------
2018 2017
---------- --------
Unaudited
--------------------
Euros in thousands
(except per share
data)
--------------------
Loss for the period (9,771) (6,778)
Other comprehensive income
Items that are or may be reclassified to profit
or loss:
Foreign currency translation differences - foreign
operations (Equity accounted investees) (805) (876)
---------- --------
Other comprehensive loss for the period (805) (876)
---------- --------
Total comprehensive loss for the period (10,576) (7,654)
========== ========
The accompanying notes are an integral part of the condensed
interim consolidated financial statements.
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN
EQUITY
Capital reserve
from acquisition
Share based of
Share Share payment Translation non-controlling Retained
capital Premium reserves Reserve interests losses Total
-------- -------- ----------- ----------- ----------------- --------- --------
Balance at January
1, 2018 6,856 282,596 35,376 (28,800) (19,983) (267,682) 8,363
Adjustments on
initial
application of
IFRS 9 (see
Note 2b) - - - - - 1,399 1,399
Comprehensive
loss for
the year
Net loss for the
year - - - - - (9,771) (9,771)
Foreign currency
translation
differences - - - (805) - - (805)
Total
comprehensive
loss
for the year - - - (805) - (9,771) (10,576)
-------- -------- ----------- ----------- ----------------- --------- --------
Balance at June
30, 2018
(unaudited) 6,856 282,596 35,376 (29,605) (19,983) (276,054) (814)
-------- -------- ----------- ----------- ----------------- --------- --------
Share Share Share based Translation Retained
capital Premium payment reserves Reserve Other reserves losses Total
-------- -------- ---------------- ----------- -------------- --------- -------
Balance at
January 1, 2017 6,856 282,596 35,376 (27,103) (19,983) (241,119) 36,623
-------- -------- ---------------- ----------- -------------- --------- -------
Comprehensive
loss for
the year
Net loss for the
year (6,778) (6,778)
Foreign currency
translation
differences (876) (876)
-------- -------- ---------------- ----------- -------------- --------- -------
Total
comprehensive
loss
for the year - - - (876) - (6,778) (7,654)
Balance at June
30, 2017
(unaudited) 6,856 282,596 35,376 (27,979) (19,983) (247,897) 28,969
-------- -------- ---------------- ----------- -------------- --------- -------
The accompanying notes are an integral part of the interim
condensed consolidated financial statements.
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
Six months ended
June 30,
--------------------
2018 2017
--------- ---------
Unaudited
--------------------
Euros in thousands
--------------------
Cash flows from operating activities:
Loss for the period (9,771) (6,778)
Adjustments necessary to reflect cash flows used
in operating activities
Depreciation of property and equipment 156 16
Net finance costs 4,286 10,644
Share of loss of equity-accounted investees 397 170
Gain from sale of subsidiaries - (4,779)
Income tax expense (tax benefit) 1 (314)
--------- ---------
(4,931) (1,041)
--------- ---------
Changes in:
Trade receivables 17 (3,101)
Other receivables 458 2,942
Trading properties 3,401 2,159
Trade payables 26 (366)
Other liabilities, related parties' liabilities
and provisions (839) (946)
--------- ---------
3,063 688
--------- ---------
Interest paid (3,000) (6,238)
Taxes paid (1) (10)
--------- ---------
Net cash used in operating activities (4,869) (6,601)
--------- ---------
Cash from investing activities
Proceeds from sale of property and equipment 1 3,703
Proceeds from sale of subsidiaries (Appendix
A) - 50,218
Distribution received from equity accounted investees 2,115 221
Changes in restricted cash - 3,207
Net cash provided by investing activities 2,116 57,349
--------- ---------
The accompanying notes are an integral part of the interim
condensed consolidated financial statements.
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
Six months ended
June 30,
--------------------
2018 2017
--------- ---------
Unaudited
--------------------
Euros in thousands
--------------------
Cash from financing activities
Proceed from bank loans - 4,029
Repayment of debentures (40,053) (51,090)
Repayment of interest bearing loans from banks - (707)
--------- ---------
Net cash used in financing activities (40,053) (47,768)
--------- ---------
Effect of exchange fluctuations on cash held (790) -
Increase (Decrease) in cash and cash equivalents
during the year (43,596) 2,980
Cash and cash equivalents as at January 1(st) 44,844 5,646
--------- ---------
Cash and cash equivalents as at June 30 1,248 8,626
========= =========
Appendix A - Proceeds from sale of investments
in previously consolidated subsidiaries:
The subsidiaries assets and liabilities at date
of sale:
Working capital (excluding cash and cash equivalents) - (9,359)
Trading Properties - 97,360
Bank Loans -(42,000)
Gain from sale of subsidiaries - 4,217
--------
- 50,218
========
The accompanying notes are an integral part of the interim
condensed consolidated financial statements
NOTE 1: - CORPORATE INFORMATION
Plaza Centers N.V. ("the Company" and together with its
subsidiaries, "the Group") was incorporated and is registered in
the Netherlands. The Company's registered office is at Prins
Hendrikkade 48-S, 1012 AC, Amsterdam, the Netherlands. In past the
Company conducted its activities in the field of establishing,
operating and selling of shopping and entertainment centers, as
well as other mixed-use projects (retail, office, residential) in
Central and Eastern Europe (starting 1996) and India (from 2006).
Following debt restructuring plan approved in 2014 the Group main
focus is to reduce corporate debt by early repayments following
sale of assets and to continue with efficiency measures and cost
reduction where possible.
The condensed interim consolidated financial statements for each
of the periods presented comprise the Company and its subsidiaries
(together referred to as the "Group") and the Group's interest in
jointly controlled entities.
The Company is listed on the premium segment of the Official
List of the UK Listing Authority and to trading on the main market
of the London Stock Exchange ("LSE"), the Warsaw Stock Exchange
("WSE") and on the Tel Aviv Stock Exchange ("TASE").
The Company's immediate parent company is Elbit Ultrasound
(Luxemburg) B.V. / s.a.r.l ("EUL"), which holds 44.9% of the
Company's shares, at the end of the reporting period. The Company
regards Elbit Imaging Limited ("EI") as the ultimate parent
company.
NOTE 2: - BASIS OF PREPARATION
a. Basis of preparation of the interim condensed consolidated financial data:
The interim condensed consolidated financial data for the six
months period ended June 30, 2018 have been prepared in accordance
with the International Financial Reporting Standard IAS 34
("Interim Financial Reporting") as adopted by the European Union.
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 annual financial statements as at 31 December 2017.
Selected explanatory notes are, however, included to explain
events and transactions that are significant to understanding the
changes in the Group's financial position and performance since the
last annual consolidated financial statements as at and for the
year ended December 31, 2017.
The interim condensed consolidated financial statements as of
June 30, 2018 were authorized by the Board of Directors on 20
August 2018.
NOTE 2:- BASIS OF PREPARATION
b. New standards, interpretations and amendments adopted by the Group:
The accounting policies adopted in the preparation of the
interim condensed consolidated financial statements are consistent
with those followed in the preparation of the Group's annual
consolidated financial statements for the year ended 31 December
2017, except for the adoption of new standards effective as of 1
January 2018. The Group has not early adopted any other standard,
interpretation or amendment that has been issued but is not yet
effective.
The Group applies, for the first time, IFRS 9 Financial
Instruments. As required by IAS 34, the nature and effect of these
changes are disclosed below.
Several other amendments, including adoption of IFRS 15 Revenue
from Contracts with Customers, and interpretations apply for the
first time in 2018, but do not have an impact on the interim
condensed consolidated financial statements of the Group.
Financial instruments:
With respect to the initial adoption of IFRS 9, "Financial
Instruments" ("the Standard"), the Company chose to adopt the
provisions of the Standard retrospectively without restatement of
comparative figures.
The new accounting policy regarding financial instruments is as
follows:
1. Financial assets:
Financial assets within the scope of the Standard are measured
upon initial recognition at fair value with the addition of
transaction costs that can be directly attributed to the financial
asset's acquisition, excluding financial assets that are measured
at fair value through profit or loss whereby the transaction costs
are carried to profit or loss.
a) Debt instruments are measured at amortized cost when the following criteria are met:
The Company's business model consists of holding the financial
assets for collecting contractual cash flows therefrom; and the
contractual cash flow terms of the financial asset provide
entitlement to cash flows which only include principal payments and
interest on the unpaid principal on predetermined dates. After
initial recognition, the instruments in this category are presented
according to their terms at cost with the addition of directly
attributable transaction costs using the amortized cost method.
NOTE 2:- BASIS OF PREPARATION
2. Impairment of financial assets:
The Company reviews at the end of each reporting period the
provision for loss of financial debt instruments which are not
measured at fair value through profit or loss.
The Company has financial assets bearing short-term credit such
as trade receivables in respect of which it is required to adopt
the relief prescribed in the model and measure the provision for
loss in an amount which is equivalent to the expected credit losses
throughout the instrument's term. The Company chose to adopt the
relief in respect of these financial assets.
3. Derecognition of financial assets:
A financial asset is only derecognized when the following
criteria are met:
- The contractual rights to the cash flows from the financial asset expire; or
- The Company has transferred substantially all the risks and
rewards deriving from the contractual rights to receive cash flows
from the financial asset or has neither transferred nor retained
substantially all the risks and rewards of the asset, but has
transferred control of the asset.
- The Company has retained its contractual rights to receive
cash flows from the financial asset but has assumed a contractual
obligation to pay the cash flows in full without material delay to
a third party.
4. Financial liabilities:
Financial liabilities within the scope of the Standard are
initially recognized at fair value less transaction costs that are
directly attributable to the issue of the financial liability,
excluding financial liabilities measured at fair value through
profit or loss whose transaction costs are carried to profit or
loss.
5. Derecognition of financial liabilities:
A financial liability is derecognized only when it is
extinguished, that is when the obligation is discharged or
cancelled or expires. A financial liability is extinguished when
the debtor discharges the liability by paying in cash, other
financial assets, goods or services; or is legally released from
the liability.
When an existing financial liability is exchanged with another
liability from the same lender on substantially different terms, or
the terms of an existing liability are substantially modified, such
an exchange or modification is accounted for as an extinguishment
of the original liability and the recognition of a new liability.
The difference between the carrying amounts of the above
liabilities is recognized in profit or loss.
NOTE 2:- BASIS OF PREPARATION
If the exchange or modification is not substantial, the Company
is required to update the carrying amount of the original liability
by discounting the modified cash flows discounted at the original
effective interest rate and recognize a gain or loss in profit or
loss.
When evaluating whether the change in the terms of an existing
liability is substantial, the Company takes into account both
quantitative and qualitative considerations.
6. Offsetting financial instruments:
Financial assets and financial liabilities are offset and the
net amount is presented in the statement of financial position if
there is a legally enforceable right to set off the recognized
amounts and there is an intention either to settle on a net basis
or to realize the asset and settle the liability
simultaneously.
Revenue from Contracts with Customers:
The accounting policy on revenue recognition based on IFRS 15,
"Revenue from Contracts with Customers" ("the Standard") adopted
effective from January 1, 2018 retrospectively without restatement
of comparative figures and is as follows:
1. Revenue recognition:
According to the Standard, revenue from contracts with customers
is recognized in profit or loss when the control over the asset or
service is transferred to the customer. Revenue is measured and
recognized at the fair value of the consideration that is expected
to be received based on the contract terms, less the amounts
collected in favor of third parties (such as taxes). Where a
contract contains elements of variable consideration, the entity
will estimate the amount of variable consideration to which it will
be entitled under the contract. Revenue is recognized in profit or
loss to the extent that it is probable that the economic benefits
associated with the contract will flow to the Company and that the
costs incurred or to be incurred in respect of the contract can be
measured reliably.
Initial adoption of IFRS 9, "Financial Instruments":
In July 2014, the IASB issued the final and complete version of
IFRS 9, "Financial Instruments" ("the new Standard"), which
replaces IAS 39, "Financial Instruments:
The effect of the initial adoption of the new Standard on the
Company's financial statements is as follows:
NOTE 2:- BASIS OF PREPARATION
Derecognition of financial liabilities:
The Company modified the terms of previously issued debentures
during 2016. Accordingly, the Company accounted for the
modification in conformity with the provisions of IAS 39.7A by
adjusting the effective interest rate so that the updated cash
flows, discounted at the new interest rate, will correspond to the
carrying amount of the debentures prior to said change in terms.
According to the new Standard, the Company accounts for the
modification by recognising the difference between the discounted
updated cash flows, after the change in terms and using the
original effective interest rate, and the carrying amount to profit
or loss. The effect of the above changes on the Company's financial
statements is as follows:
In the consolidated statements of financial position:
As previously According
reported The change to IFRS 9
------------- ---------- ----------
EUR in thousands
-------------------------------------
As of January 1, 2018
Bonds at amortized cost 116,914 (1,399) 115,515
Retained losses (267,682) 1,399 (266,283)
Initial adoption of IFRS 15, "Revenue from Contracts with
Customers":
The initial adoption of IFRS 15 do not have an impact on the
interim condensed consolidated financial statements of the
Group.
NOTE 3: - USE OF JUDGEMENT AND ESTIMATES
In preparing this condensed consolidated interim financial
information, management has made judgements, estimates and
assumptions that affect the application of accounting policies and
the reported amounts of assets and liabilities, income and expense.
Actual results may differ from these estimates.
In preparing this condensed consolidated interim financial
information, the significant judgments made by management in
applying the Group's accounting policies and the key sources of
estimation uncertainty were principally the same as those that
applied to the consolidated financial statements as at and for the
year ended December 31, 2017, save for the changes highlighted
above. Refer also to Note 4 below for significant estimations
performed.
NOTE 4: - GOING CONCERN AND LIQUIDITY POSITION OF THE COMPANY
The consolidated financial statements have been prepared on a
going concern basis, which assumes that the Group will be able to
meet the mandatory repayment obligations of its bonds and other
working capital requirements.
The Group's primary need for liquidity is to repay its debts and
fund general corporate purposes. The Group has incurred losses and
experienced negative operating cash flows for the past several
years, and accordingly, it has taken a number of actions to
continue to support its operations and meet its obligations.
As at June 30, 2018 the Group's outstanding obligations to
bondholders are EUR 81 million.
In January 2018, a settlement agreement was signed by and among
the Company and the two Israeli Series of Bonds including a new
repayment schedule (refer to Note 15b(2)) in the annual financial
statement as of December 31, 2017).
Information concerning the Group's obligations and commitments
to make future payments under contracts such as debt agreements in
the 18 months starting July 1, 2018 is aggregated in the following
tables.
Total Payment Due by
period
(in TEUR)
------------------------
Within Within 1-1.5
Liquidity Requirements 1 year year
------------------------------------ --------- -------------
Bonds including current portion and
interest 54,400 8,200
General & administrative (**) 2,400 1,000
--------- -------------
Total liquidity requirements 56,800 9,200
Total Sources (*) 16,000 9,700
--------- -------------
Total deficit (40,800) 500
--------- -------------
(*) The Company expects to increase the amount of its liquid
balances during the 18 months starting July 1, 2018, by sale of
plots of lands (including India) and others.
(**) Including estimated cost of plots maintenance.
The board and management estimate that there are significant
doubts regarding the Company's ability to serve its entire debt
according to the current repayment schedule. Moreover, following
the new payment structure for the sale of the project in Bangalore,
India (refer to Note 7(e)) and the expected changes in the sale
dates of certain assets, it is expected that the Company will not
be able to meet its entire contructual obligations in the following
12 months.
Management acknowledges that the above expected cash flows are
based on forward-looking plans and estimations which rely on the
information known to management at the time of the approval of
these condensed consolidated interim financial statements. The
materialization of the above forecast is not certain and is subject
to factors beyond the Company's control. Therefore, delays in the
realization of the Group's assets and investments or realization at
lower price than expected by management could have an adverse
effect on the Group's liquidity position and its ability to meet
its contractual obligations on a timely manner.
NOTE 4: - GOING CONCERN AND LIQUIDITY POSITION OF THE COMPANY
Management further acknowledges that the Company is exposed to
foreign currency risk derived from borrowings denominated in
currency other than the functional currency of the Group, more
specifically a further devaluation of the EUR against the NIS can
significantly increase the remaining contractual obligation to
bondholders.
As of June 30, 2018 the Company is not in compliance with
Coverage Ratio Covenant ("CRC") as defined in the restructuring
plan. This may entitle the bondholders to declare that all or a
part of their respective (remaining) claims become immediately due
and payable.
The Company's financial statements as of December 31, 2017
include an auditor's opinion with emphasis of matter to going
concern uncertainty. As a result, there is a risk that the
bondholders could argue that there exists a substantial suspicion
with respect to the Company's ability to repay its obligations that
entitles them to immediate repayment.
In addition, based on trust deeds in case of material
deterioration in the Company's business and substantial suspicion
exists that the Company will not be able to repay the bonds on
time, the bondholders may declare immediate repayment of bonds.
In respect of credit rating downgrade followed by withdraw of
credit rating by Standard & Poor at the Company's request refer
to Note 7 (c) to these condensed consolidated financial
statements.
In the case that the bondholders would declare their remaining
claims to become immediately due and payable, the Company would not
be in a position to settle those claims and would need to enter to
an additional debt restructuring or might cease to be a going
concern. As at the date of these condensed consolidated financial
statements the bondholders have not taken steps to assert their
rights.
A combination of the abovementioned conditions indicates the
existence of a material uncertainty that casts significant doubt
about the Company's ability to continue as a going concern.
NOTE 5: - FINANCIAL INSTRUMENTS
Carrying amounts and fair values
In respect to the Company's financial instruments assets not
presented at fair value, being mostly short-term market interest
bearing liquid balances, the Company believes that the carrying
amount approximates its fair value. In respect of the Company's
financial instruments liabilities:
Fair value of the quoted debentures is based on price quotations
at the reporting date and is classified as Level 1 in the fair
value hierarchy.
NOTE 5: - FINANCIAL INSTRUMENTS
Carrying amount Fair value
------------------- -------------------
June 30, December June 30, December
31, 31
2018 2017 2018 2017
--------- -------- --------- --------
Unaudited Audited Unaudited Audited
--------- -------- --------- --------
Euros in thousands
----------------------------------------
Statement of financial position
Debentures A at amortized
cost - Israeli NIS bonds 31,534 45,963 17,079 30,493
Debentures B at amortized
cost - Israeli NIS bonds 44,527 65,832 29,528 49,536
The total contractual liability of the Debentures was EUR 81
million as at June 30, 2018.
NOTE 6: - CASA RADIO
a. Following Note 8(6)(d) to the annual financial statements
which discloses potential irregularities regarding to Casa Radio
project in Romania and their potential implications, there have
been no significant events since the publication of the annual
financial statement as of December 31, 2017.
b. Following Note 8 (6)(c) to the annual financial statements
which discloses that the public authorities may seek to terminate
the Public Private Partnership Agreement and with respect to Casa
Radio asset and potential implications, there have been no
significant events since the publication of the annual financial
statements as of December 31, 2017. The Company had few meetings
with governmental officials discussing the options and possibility
to amend the PPP Agreement with no significant progress until the
date hereof.
NOTE 7:- MATERIAL EVENTS DURING THE REPORTING PERIOD
a. Settlement agreement with the Bondholders:
In January 2018, a settlement agreement has been reached and
approved (and all the conditions precedent in the agreement
fulfilled) between the holders of two Series of Israeli Bonds and
the Company regarding the allocation of funds, to be repaid by the
Company, across the Israeli Bonds Series. As a result, the Series A
Bondholders withdrawed their request for immediate repayment. In
regards to Settlement agreement principles refer to Note 15 (3) in
the annual consolidated financial statement as of December 31,
2017.
b. Retirement of Chief Executive Officer:
On 11 January, 2018 the Company announced that the CEO, Dori
Keren will retire from his position at the end of March 2018. The
Board of Directors appointed Avi Hakhamov, who has been with the
Company for more than 11 years, as Acting CEO commencing 1 April
2018.
c. Ceasing of rating by S&P:
On 18 January, 2018 S&P Maalot announced that it ceases
updating the rating of the Company's bonds following the Company's
request.
NOTE 7:- MATERIAL EVENTS DURING THE REPORTING PERIOD
d. Earn-out payment for the sale of Torun:
In June 2018 the Company received the earn-out payment for the
sale of Torun Plaza in amount of EUR 0.35 million, reduced by NAV
adjustment of EUR 0.14 million.
e. Sale agreement of Plot in India:
In January 2018, the Purchaser of the 100% interest in an SPV
(in which Plaza holds a 50% stake with its joint venture partner,
Elbit Imaging Ltd.), that holds property in Bangalore, India, (the
"Agreement" and the "Purchaser" respectively), has given notice
that all remaining payments under the Agreement will be stopped
until a mutually acceptable solution is reached due to a proposed
change (initiated by the Indian authorities) which could
potentially impact the development of the land. In February,
despite the notice above, the Purchaser has paid the January
instalment in the amount of INR 5 Crores (circa EUR 0.65
million).
In March 2018, the Company and the Purchaser signed an amended
revised agreement as follows: the Purchaser and EPI have agreed
that the total purchase price shall be increased to INR 350 Crores
(approximately EUR 43.8 million, the Company's share approximately
EUR 21.9 million). Following the signing of the revised agreement
the Purchaser paid EPI additional INR 22.5 Crores (approximately
EUR 2.8 million, the Company's share approximately EUR 1.4 million)
further to the INR 45 Crores (approximately EUR 5.6 million, the
Company's share approximately EUR 2.8 million) that were already
paid during the recent year.
Additional INR 70.5 Crores (approximately EUR 8.8 million, the
Company's share approximately EUR 4.4 million) will be paid by the
Purchaser in unequal monthly instalments until the Final Closing.
The Final Closing will take place on 31 August 2019 when the final
instalment of INR 212 Crores (approximately EUR 26.5 million, the
Company's share approximately EUR 13.25 million) will be paid to
EPI against the transfer of the outstanding share capital of the
SPV.
If the Purchaser defaults before the Final Closing, EPI is
entitled to forfeit certain amounts paid by the Purchaser as
stipulated in the revised agreement. All other existing Securities
granted to EPI under the previous agreements will remain in place
until the Final Closing.
f. Motion to reveal and review internal documents:
In March 2018, a Shareholder of the Company has filed a motion
with the Financial Department of the District Court in Tel-Aviv to
reveal and review internal documents of the Company and of Elbit
Imaging Ltd., with respect to the events surrounding that certain
agreements that were signed in connection with the Casa Radio
Project in Romania and the sale of the US portfolio. Such events
were previously announced by the Company and are detailed in notes
8(6) and 27(d) in the annual financial statement as of December 31,
2017. In July 2018, the Company has filed a response to the
relevant court.
NOTE 7:- MATERIAL EVENTS DURING THE REPORTING PERIOD
g. Redemption of the Polish Bonds:
In May 2018, further to the decision of the Israeli Series A and
Series B Bondholders, the Company has redeemed in full the series
of bonds issued in Poland at their principal amount together with
interest accrued to the maturity date in total amount of EUR 11
million. Upon completion of the redemption, the Company has no
outstanding bonds issued in Poland.
h. Claim in Greece:
In May 2018, a third party has filed a legal claim in the court
of Greece against Helios Plaza AE ("HP"), a fully owned subsidiary
of Plaza which holds land property in Athens ("Land Property"). The
claimant is claiming from HP an amount of EUR 2.96 million based on
a certain allegedly agreement that was claimed to be agreed in
2010, and has also filed a request for an injunction with respect
to the Land Property in order to secure its claim. In June 2018,
the injunction was granted until final decision regarding the main
dispute. At this preliminary stage, the Company and its legal
advisors are unable to estimate the probability of the claim and
its possible implication if any.
Due to these new circumstances the sale of the Land Property was
put on hold, and the Company is discussing with the existing
potential buyer the options forward.
The Company recorded a write-down of EUR 1.15 million which
reflect expected transaction costs.
NOTE 8: - SUBSEQUENT EVENTS
a. Chennai, India:
In July 2018, Elbit Plaza India Real Estate Holdings Limited
("EPI"), has signed a term sheet with its local partner ("Buyer"),
relating to the sale of EPI's Indian subsidiary ("SPV") that holds
74.7 acre plot in Chennai, India ("Term Sheet"). Under the terms of
the Term sheet, the Buyer shall have 60 (sixty) days to conduct due
diligence only with respect to the SPV, following which definitive
agreements, for the sale of the SPV in consideration for INR 110
Crores (approximately EUR 13.75 million, the Company's share
approximately EUR 6.8 million), (subject to adjustment with respect
to the previous deposit that was placed and the existing cash in
the SPV level), shall be signed and closing shall take place on the
same day.
As a result, the Company recorded as share in losses of equity -
accounted investees total amount of EUR 312 thousand to reflect the
purchase price based on term sheet.
b. Lodz Centrum Plaza:
In July 2018, a subsidiary of the Company has signed a
preliminary agreement with respect to the sale of the land plot
known as "Lodz Centrum Plaza", in consideration for PLN 1.3
million. The agreement is conditional upon the pre-emptive right of
the municipality of Lodz.
NOTE 8: - SUBSEQUENT EVENTS
c. Request to reveal documents:
An indirect subsidiary of the Group in Romania (which holds plot
of land outside Bucharest) received a request from Romanian
authorities to reveal documents regarding the years in 2007-2011 as
part of an ongoing investigation procedures. The company is unaware
of the subject of investigation and any illegal acts or
irregularities which may cause investigation initiated.
- - - - - - - - - - -
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR SEWFDSFASELA
(END) Dow Jones Newswires
August 20, 2018 11:30 ET (15:30 GMT)
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