TIDMPLAZ
RNS Number : 0044L
Plaza Centers N.V.
31 August 2023
31 August 2023
PLAZA CENTERS N.V.
RESULTS FOR THE SIX MONTHSED 30 JUNE 2023
Plaza Centers N.V. ("Plaza" / "Company" / "Group") today
announces its results for the six months ended 30 June 2023. The
financial information for the half year ended 30 June 2023 and 30
June 2022 has neither been audited nor reviewed by the
auditors.
Financial highlights:
-- Reduction in total assets by EUR1.7 million to EUR6.6 million
mainly as a result of general and legal expenses.
-- Consolidated cash position as of June 30, 2023 decreased by
circa EUR1. 4 million to app. EUR 6.4 million (December 31, 2022:
EUR7.8 million) as a result of general and legal expenses.
-- EUR0.9 million loss recorded at an operating level (June 30,
2022: EUR1.3 million loss) mainly due to general and legal
expenses.
-- Recorded loss of EUR0.6 million (June 30, 2022: EUR6.3
million), mainly due to finance results on bonds, general and legal
expenses.
-- Basic and diluted loss per share of EUR0.09 (30 June 2022: loss per share of EUR0.92).
Material events during the period:
Tax authority investigation :
On March 27, 2023 the Company announced that the Tax Authority
of the state of India initiated certain actions at the office of
Elbit Plaza India Management Services Private Limited (which is a
private company wholly owned by Elbit Plaza India Real Estate
Holdings Limited) (hereinafter: "EPM") including a search and
seizer of certain documents relating to EPM's
activities/transactions in India in recent years. At this stage it
is not yet clear what the purpose of the investigation is,
including whether EPM is the purpose of the investigation or
whether the investigation is related to any third party.
Update regarding a change in Elbit Imaging Ltd holdings:
Since announcement dated January 13, 2022 and up to last
announcement dated July 13, 2023 Elbit Imaging sold about 48,6
thousand shares of the Company for a total consideration of
approximately NIS 76 thousand, thus, Elbit Imaging holdings in the
Company have diminished to 19.85% of the Company's issued and
paid-up capital.
Deferral of payment of Debentures and partial interests'
payment:
Refer to the below in Liquidity & Financing.
Dutch statutory auditor:
Refer to Note 7(c) in the interim condensed consolidated
financial statements as of June 30, 2023.
Update regarding submission of a request for arbitration against
Romania with respect to the "Casa Radio" project:
On April 11, 2023 the Company announced, that having on May 16,
2022 issued a Request for Arbitration against Romania with respect
to the "Casa Radio" project (the "Project"), on April 6, 2023 the
Company filed its Memorial and supporting evidence at the
International Centre for the Settlement of Investment Disputes,
setting out its claims against Romania. The Company seeks full
compensation for its losses with respect to the Project, currently
estimated to be up to EUR 367,700,000 as at 31 March, 2023.
Further, on May 18, 2023 the Company submitted its objection to
Romania's Request for Bifurcation into separate phases on
jurisdiction and the merits. Romania's application has been
rejected and it has now been determined that the Arbitration will
not be bifurcated. Romania is now required to file its defence to
the Company's claims.
On July 12, 2023, Plaza and Dambovita Center SRL (a subsidiary
of Plaza and the Project Company in charge of the Casa Radio
Project) received a notice of default from the Ministry of Finance
under the public-private partnership contract governing the Casa
Radio Project. The Company denies all claims formulated by the
Ministry of Finance, including any made in the ongoing ICSID
arbitration with Romania.
Update regarding a lawsuit against entities involved in the sale
of U.S.A shopping centers in 2011 :
On June 19, 2023 the Company announced, further to its
announcements, regarding the filing of a lawsuit by the Company and
Elbit Imaging Ltd. ("Elbit") against certain parties (certain
officers of the Company and Elbit, a portion of the heirs of the
late Mr. Motti Zisser (the Company's and Elbit's former controlling
shareholder) and other parties) (the "Respondents") who were
involved in a transaction of the Company and Elbit for the sale of
real estate properties in the U.S.A. in 2011 and for which funds
(brokerage fees) were allegedly illegally transferred to private
companies controlled by the late Mr. Motti Zisser (the "Lawsuit");
and further to the Company's announcement dated August 10, 2021 and
to the details provided in Note 16(b)(5) in the Company's annual
consolidated financial statements for the year 2022 regarding the
approval by the District Court of an application submitted by one
of the respondents, Mr. Philip Meyer, for the dismissal in limine
of the Lawsuit and the appeal submitted by the Company and Elbit to
the Supreme Court on November 14, 2021; and further to the
Company's announcement dated May 31, 2023 regarding the fact that
the Company's and Elbit's appeal was accepted by the Supreme Court;
the Company hereby announces that a settlement agreement has been
reached between the plaintiffs and two of the Respondents. The
court approved the settlement agreement and gave it the effect of a
judgment and imposed a publication ban on its details. According to
the provisions of the settlement agreement, the Company's portion
after deducting expenses is a few hundred thousand euros and should
be received over a period of several months, and the Company and
Elbit will continue to handle the legal proceeding in the District
Court while each party shall maintain all of its claims in the main
proceeding.
Key highlights since the period end:
Annual General Meeting:
On July 20, 2023 the Company announced, that Annual General
Meeting of the Company's shareholders ("AGM") scheduled to take
place on August 9, 2023 is postponed to take place on November 6,
2023 at the offices of the Company.
Commenting on the results, executive director Ron Hadassi
said:
"The Company is continuing to take all necessary steps with Casa
Radio Project. The Company has submitted with the International
Centre for Settlement of Investment Disputes ("ICSID") a Request
for Arbitration (the "Request") against Romania for compensation of
losses incurred due to failure of the Romanian authorities to
cooperate, negotiate and adjust the PPP agreement."
For further details, please contact:
Plaza
Ron Hadassi, Executive Director 972-526-076-236
Notes to Editors
Plaza Centers N.V. ( www.plazacenters.com ) 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.
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.
MANAGEMENT STATEMENT
During first half of 2023 the Company also continued cost
reductions in administrative expenses and costs of operations. In
connection with Casa Radio Project, as stated above, the Company
issued a Notice of Dispute and Acceptance of Offer and Consent to
Arbitrate to Romania with respect to the Project and we hope this
will help us to unblock the current status of the Project. In
addition, on December 13, 2022 the Company and AFI Europe N.V.
("AFI Europe") agreed to extend the Long Stop Date, which is the
date on which the parties will execute a share purchase agreement,
subject to the satisfaction of conditions precedent (the "SPA"),
until December 31, 2023.
Due to the board and management estimation that the Company is
unable to serve its entire debt according to the current redemption
date (January 1, 2024) in its current liquidity position, the
Company intends to request from the bondholders of both series
(Series A and Series B) postponement of the repayment of the
remaining balance of the bonds.
Results
During the first half of the year, Plaza recorded a EUR0.6
million loss attributable to the shareholders of the Company (30
June 2022: EUR6.3 million). Total result of operations excluding
finance income and finance cost was a loss of EUR0.9 million in
2023 compared to reported loss of EUR1.3 million in the first half
of 2022. The losses were mainly due to administrative expenses and
arbitration costs.
Liquidity & Financing
Plaza ended the period with a consolidated c ash position of
circa EUR6.4 million, compared to EUR7.8 million at the end of
2022.
As of June 30, 2023, the Group's outstanding obligation to
bondholders (including accrued interests) are app. EUR127.6
million.
As disclosed in Note 7(d) below the Company was not able to meet
its final redemption obligation to its (Series A and Series B)
bondholders, due on July 1, 2023, and the bondholders approved to
postpone the final redemption date to January 1, 2024.
Due to the board and management estimation that the Company is
unable to serve its entire debt according to the current bond's
repayment schedule in its current liquidity position, the Company
intends to request the bondholders of both series to postpone the
repayment of the remaining balance of the bonds. However, there is
an uncertainty if the bondholders will approve the request. 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 into an
additional debt restructuring or might cease to be a going
concern.
Strategy and Outlook
The Company's priorities are focused on efforts to sign
definitive sale agreement of Casa Radio project. The Company also
intends to seek for bondholders' approval for postponement of the
repayment of the bonds. In addition, the Company intends to
continue the cost-cutting of its operational cost.
OPERATIONAL REVIEW
The Company's current assets are summarised in the table below
(as of balance sheet date):
Asset/ Location Nature of asset Size Plaza's Status
Project sqm (GLA) effective
ownership
%
Casa Radio Bucharest, Mixed-use retail, 467,000 (GBA 75 Pre-sale agreement
Romania hotel and leisure including signed
plus office scheme parking spaces)
----------- -------------------- ----------------- ----------- -------------------
FINANCIAL REVIEW
Results
In 2023, the administrative expenses amounted to EUR0.9 million,
an increase comparing to EUR0.6 million in the first half of 2022.
The increase was a result of additional expenses for legal services
in respect to initiated by the Company of an arbitration process in
Romania as states above in connection with Casa Radio Project.
Net finance incomes changed from EUR4.9 million loss in the
first 6 months of 2022 to EUR0.3 million gain in the first 6 months
of 2023. The main components of net finance incomes were foreign
currency gain on bonds (including inflation) and interests'
expenses accrued on the debentures which includes also penalty
interest calculated on the deferred principal.
As a result, the loss for the period amounted to circa EUR0.6
million in the first 6 months of 2023, representing a basic and
diluted loss per share for the period of EUR0.09 (H1 2022: EUR0.92
loss).
Balance sheet and cash flow
The balance sheet as of 30 June 2023 showed total assets of
EUR6.6 million compared to total assets of EUR8.3 million at the
end of 2022 , mainly as a result of administrative expenses and
costs of operations .
The consolidated cash position (cash on standalone basis as well
as fully owned subsidiaries) as of 30 June 2023 decreased to EUR6.4
million (31 December 2022: EUR7.8 million).
As of 30 June 2023, the Company has a balance sheet liability of
EUR94.5 million from issuing bonds on the Tel Aviv Stock Exchange.
Additionally, the Company recorded provision for interests on bonds
as of June 30, 2023, in an amount of EUR33.1 million (31 December
2022: EUR29.9 million).
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 Note 1(b). In light of the material uncertainty that the SPA
between the Company and AFI Europe N.V. will eventually be executed
and/or that the transaction will be consummated as presented above
or at all (refer to Note 5), the board and management estimates
that the Company is unable to serve its entire debt according to
the due date the bondholders approved to postpone the final
redemption date. Accordingly, it is expected that the Company will
not be able to meet its entire contractual obligations in the
following 12 months.
With such warning signs, the Company is providing projected cash
flow for the period of 24 months following for the coming two
years.
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. During first three months of 2017, the
Company paid to its bondholders a total amount of NIS 191.7 million
(EUR 49.2 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 million) 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 and among
the Company and the two Israeli Series of Bonds.
On November 22, 2018 the Company announced based on its current
forecasts, that the Company expected to pay the accrued interest on
Series A and Series B Bonds on December 31, 2018, in accordance
with the repayment schedule determined in the Company's
Restructuring Plan and Settlement Agreement with Series A and
Series B Bondholders from 11 January 2018 (the "Settlement
Agreement"). The Company noted that it will not meet its principal
repayment due on December 31, 2018 as provided for in the
Settlement Agreement. On February 18, 2019 the Company paid
principal of circa EUR 250,000 and Penalty interest on arrears of
EUR 150,000 following the bondholder's approval to defer principal
repayment to July 1, 2019.
In addition, during June 2019 the bondholders approved the
deferral of the full payment of principal due on July 1, 2019 and
of 58% ("deferred interest amount") of the sum of interest
(consisting of the total interest accrued for the outstanding
balance of the principal, including interest for part of the
principal payment which was deferred as of February 18, 2019, plus
interest arrears for part of the principal which was fixed on
February 18, 2019 and was not paid by the Company and all in
accordance with the provisions of the trust deed; "the full amount
of interest"), the effective date of which is June 19, 2019, and
the payment date was fixed as of July 1, 2019. The company paid on
the said date a total amount of circa EUR 1.17 million, which is
only 42% of the full amount of interest.
On July 11, 2019, the Company announced that its Romanian
subsidiary had signed a binding agreement to sell land in Romania
(refer to Note 5(3)(f) of the consolidated financial statements as
of December 31, 2020), and that the Company would use part of the
proceeds now received by it EUR 0.75 million (hereinafter: "the
amount payable"), in order to make a partial interest payment to
the bondholders (Series A) and (Series B) issued by the Company.
The payment required changes in the repayment schedule and
amendments of the trust deeds which was approved unanimously by the
Bondholders. The amount payable was paid on August 14, 2019 and
reflects 30% of accrued interest as of that date.
On November 17, 2019, the bondholders of Series A and Series B
approved a deferral of all the scheduled Principal payment and app.
87% of deferral of the scheduled Interest payment, both, as of
December 31, 2019 to July 1, 2020.
On May 4, 2020, the bondholders of Series A and Series B
approved: (i) to postpone the final redemption date to January 1,
2021 of all the scheduled Principal; (ii) that on July 1, 2020 the
Company will pay to its bondholders a partial interest payment in
the total amount of EUR 250,000 and to deferral all other unpaid
scheduled Interest payment.
Following receiving the Settlement Amount related to the final
price adjustment of the sale of Belgrade Plaza and in light of the
potential negative impact of the Covid-19 on the possibility to
receive future proceeds from the Company's plots in India, the
Company decided to increase the amount to be paid to the
bondholders on July 1, 2020, from EUR 250,000 to EUR 500,000. The
amount reflected 6.74% of accrued interest as of that date.
On November 12, 2020, the bondholders of Series A and Series B
approved: (i) to postpone the final redemption date to July 1, 2021
of all the scheduled Principal; that on January 1, 2021 the Company
will pay to its bondholders a partial interest payment in the total
amount of EUR 200,000 and to deferral all other unpaid interest.
The amount reflected 1.84% of accrued interest as of that date.
On April 12, 2021, the bondholders of Series A and Series B
approved: (i) to postpone the final redemption date to January 1,
2022; (ii) that on July 1, 2021 the Company will pay to its
bondholders a partial interest payment in the total amount of EUR
125,000 and to deferral all other unpaid interest. The amount
reflected 0.84% of accrued interest as of that date.
On November 25, 2021, the bondholders of Series A and Series B
approved: (i) to postpone the final redemption date to July 1,
2022; (ii) that on January 1, 2022 the Company will pay to its
bondholders a partial interest payment in the total amount of EUR
125,000 and to deferral all other unpaid interest. The amount
reflected 0.92% of accrued interest as of that date.
On June 16, 2022, the bondholders of Series A and Series B
approved to postpone the final redemption date to January 1,
2023.
On November 8, 2022, the bondholders of Series A and Series B
approved: (i) to postpone the final redemption date to July 1,
2023; (ii) that on January 1, 2023 the Company will pay to its
bondholders a partial interest payment in the total amount of EUR
2,000,000 and to deferral all other unpaid interest. The amount
reflected 6.08% of accrued interest as of that date.
Further, in 2023 the bondholders of Series A and Series B
approved: (i) to postpone the final redemption date to January 1,
2024; (ii) that on July 1, 2023 the Company will pay to its
bondholders a partial interest payment in the total amount of EUR
750,000 and to deferral all other unpaid interest. The amount
reflected 6.08% of accrued interest as of that date.
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.
In EUR millions 7-12/2023 2024
Cash - Opening Balance (2) 6.40 5.35
Proceeds from other income (3) 0.15 -
Total Sources 6.55 5.35
Debentures - principal - -
Debentures - interest (4) - -
Other operational costs (5) 0.8 1.0
G&A expenses (including property maintenance)
(6) 0.4 0.8
Total Uses 1.2 1.8
Cash - Closing Balance (2) 5.35 3.55
1. The above cash flow is subject to the approval of the
bondholders of both series to postpone the repayment of the
remaining balance of the bonds which is due on January 1, 202 4
.
2. Total cash on standalone basis as well as fully owned subsidiaries.
3. The Company did not include any proceeds from pre-sale
agreement signed with AFI, due to the uncertainty as to the
fulfilment of the conditions set out in the preliminary agreement
as mentioned in Note 5 of the interim condensed consolidated
financial statements as of June 30, 2023, thus there can be no
certainty an the SPA will eventually be executed and/or that the
Transaction will be completed.
4. Payments of interests are subject to the approval of the bondholders of both series.
5. The cost includes a provision for arbitrations / legal cost s
based on projection of arbitration process.
6. Total general and administrative expenses includes both costs
of the Company and of all the subsidiaries.
Ron Hadassi
Executive Director
31 August 2023
PLAZA CENTERS N.V.
INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF JUNE 30, 2023
NOT AUDITED AND NOT REVIEWED
IN '000 EUR
CONTENTS
Page
Interim condensed consolidated statements of financial
position 2 - 3
Interim condensed consolidated statements of profit
or loss 4
Interim condensed consolidated statements of comprehensive
income 5
Interim condensed consolidated statements of changes
in equity 6
Interim condensed consolidated statements of cash flows 7
Notes to interim condensed consolidated financial statements 9 - 15
- - - - - - - - - - -
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL
POSITION
December
June 30, 31,
2023 2022
------------- --------
EUR '000 EUR '000
Not audited Audited
Not reviewed
ASSETS
Cash and cash equivalents 6,373 7,769
Restricted bank deposits - 422
Prepayments and other receivables 235 48
Total current assets 6,608 8,239
------------- --------
Equity accounted investees - 63
Total non-current assets - 63
------------- --------
Total assets 6,608 8,302
============= ========
The accompanying notes are an integral part of the interim
condensed consolidated financial statements.
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL
POSITION
December
June 30, 31,
2023 2022
------------- ---------
EUR '000 EUR '000
Not audited Audited
Not reviewed
LIABILITIES AND EQUITY
LIABILITIES AND SHAREHOLDERS' EQUITY
Bonds 94,482 98,738
Accrued interests on bonds 33,149 29,893
Trade payables 63 28
Other liabilities 327 431
------------- ---------
Total current liabilities 128,021 129,090
------------- ---------
Share capital 6,856 6,856
Translation reserve (30,766) (30,742)
Other reserves (19,983) (19,983)
Share based payment reserve 35,376 35,376
Share premium 282,596 282,596
Retained losses (395,492) (394,891)
------------- ---------
Total equity (121,413) (120,788)
------------- ---------
Total equity and liabilities 6,608 8,302
============= =========
The accompanying notes are an integral part of the interim
condensed consolidated financial statements.
August 31, 2023
--------------------- ------------------ ---------------------
Ron Hadassi David Dekel
Date of approval Executive Director
of the Chairman of the Board
financial statements of Directors
INTERIM CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS
Six months ended
June 30,
----------------------------
2023 2022
EUR '000 EUR '000
(except per (except
share data) per share
data)
Not audited Not audited
Not reviewed Not reviewed
Gains and other
Other income 180 146
------------- -------------
Total gains 180 146
------------- -------------
Total revenues and gains 180 146
------------- -------------
Expenses and losses
Cost of operations (62) (47)
Share in results of equity-accounted investees (39) (823)
Administrative expenses (959) (623)
Other expenses - -
------------- -------------
Expenses and losses 1,060 1,493
Finance income 6,259 884
Finance costs (5,980) (5,813)
------------- -------------
Finance income (costs), expenses and losses (781) (6,422)
------------- -------------
Loss before income tax (601) (6,276)
Income tax expense - -
------------- -------------
Loss for the period (601) (6,276)
============= =============
Earnings per share
Basic and diluted loss per share (in EURO) (0.09) (0.92)
============= =============
The accompanying notes are an integral part of the interim
condensed consolidated financial statements.
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE
INCOME
Six months ended
June 30,
----------------------------
2023 2022
------------- -------------
EUR '000 EUR '000
(except (except
per share per share
data) data)
Not audited Not audited
Not reviewed Not reviewed
Loss for the period (601) (6,276)
Other comprehensive income (loss)
Items that are or may be reclassified to profit
or loss:
Foreign currency translation differences -
foreign operations (Equity accounted investees) (24) 91
------------- -------------
Other comprehensive gain (loss) for the period (24) 91
------------- -------------
Total comprehensive loss for the period (625) (6,185)
============= =============
The accompanying notes are an integral part of the interim
condensed consolidated financial statements.
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN
EQUITY
Share
Share Share based payment Translation Other Retained
capital Premium reserves Reserve reserves losses Total
-------- -------- -------------- ----------- --------- --------- ---------
Balance on January 1,
2023 6,856 282,596 35,376 (30,742) (19,983) (394,891) (120,788)
-------- -------- -------------- ----------- --------- --------- ---------
Comprehensive loss
for
the period
Net loss for the
period - - - - - (601) (601)
Foreign currency
translation
differences - - - (24) - - (24)
Total comprehensive
loss
for the period - - - (24) - (601) (625)
-------- -------- -------------- ----------- --------- --------- ---------
Balance on June 30,
2023
(Not audited, not
reviewed) 6,856 282,596 35,376 (30,766) (19,983) (395,492) (121,413)
-------- -------- -------------- ----------- --------- --------- ---------
Share Share Share based Translation Other Retained
capital Premium payment reserves Reserve reserves losses Total
-------- -------- ----------------- ----------- --------- --------- ---------
Balance on January
1,
2022 6,856 282,596 35,376 (30,838) (19,983) (386,394) (112,387)
-------- -------- ----------------- ----------- --------- --------- ---------
Comprehensive loss
for
the period
Net loss for the
period - - - - - (6,276) (6,276)
Foreign currency
translation
differences - - - 91 - - 91
-------- -------- ----------------- ----------- --------- --------- ---------
Total comprehensive
loss
for the period - - - 91 - (6,276) (6,185)
Balance on June 30,
2022
(Not audited, not
reviewed) 6,856 282,596 35,376 (30,747) (19,983) (392,670) (118,572)
-------- -------- ----------------- ----------- --------- --------- ---------
The accompanying notes are an integral part of the interim
condensed consolidated financial statements.
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Six months ended
June 30,
----------------------------
2023 2022
------------- -------------
EUR '000 EUR '000
Not audited Not audited
Not reviewed Not reviewed
Cash flows from operating activities:
Loss for the period (601) (6,276)
Adjustments necessary to reflect cash flows used in operating
activities
Net finance costs (incomes) (279) 4,929
Share of loss of equity-accounted investees 39 823
(841) (524)
------------- -------------
Changes in:
Trade receivables 6 (19)
Other receivables (193) (46)
Change in restricted cash - (834)
Trade payables 35 107
Other liabilities, related parties' liabilities and provisions (104) (91)
------------- -------------
(256) (883)
------------- -------------
Interest paid (750) -
Net cash used in operating activities (1,847) (1,407)
Cash from investing activities
Distribution received from equity accounted investees - (88)
Investment in restricted deposit 422 -
Net cash provided by investing activities 422 (88)
------------- -------------
The accompanying notes are an integral part of the interim
condensed consolidated financial statements.
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Six months ended
June 30,
----------------------------------------
2023 2022
------------------- -------------------
EUR '000 EUR '000
Not audited Not audited
Not reviewed Not reviewed
Cash from financing activities
Net cash used in financing activities - -
------------------- -------------------
Effect of exchange fluctuations on cash held 29 (3)
Decrease in cash and cash equivalents during the period (1,425) (1,498)
Cash and cash equivalents as of January 1(st) 7,769 4,688
------------------- -------------------
Cash and cash equivalents as of June 30 6,373 3,190
=================== ===================
The accompanying notes are an integral part of the interim
condensed consolidated financial statements.
NOTE 1: - CORPORATE INFORMATION
a. 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
Pietersbergweg 283 , 1105 BM, Amsterdam, the Netherlands. In the
past the Company conducted its activities in the field of
establishing, operating and selling of shopping and entertainment
centres, 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's 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").
Until December 19, 2018 the Company's immediate parent company
was Elbit Ultrasound (Luxemburg) B.V./ s.a.r.l ("EUL"), which held
44.9% of the Company's shares. At that date EUL informed the
Company that it had signed a trust agreement according to which EUL
will deposit all of its outstanding investment with a trustee and
no longer consider itself to be the controlling shareholder of the
Company. As of June 30, 2023 EUL holds 19.85% of the Company's
shares (please refer to note 7(a)).
b. Going concern and liquidity position of the Company :
As of June 30, 2023, the Company's outstanding obligations to
bondholders (including accrued interests) are app. EUR 127.6
million due date of which was postponed to January 1, 2024 (the
"Current Due date") (please refer to Note 7(d)).
Due to the above the Company's primary need is for liquidity.
The Company's current and future resources include the
following:
1. Cash and cash equivalents (including the cash of fully owned
subsidiaries) of approximately EUR 6.4 million.
2. The Company and AFI Europe N.V. ("AFI Europe") entered into
an addendum to the pre-sale agreement entered into between the
Parties in connection with the sale of its subsidiary (the "SPV")
which holds 75% in the Casa Radio Project (the "Project") (the
"Addendum" and the "Agreement", respectively) pursuant to which the
Parties agreed to extend the Long Stop Date, which is the date on
which the parties will execute a share purchase agreement, subject
to the satisfaction of conditions precedent (the "SPA"), until
December 31, 2023. There can be no certainty that the SPA will
eventually be executed and/or that the transaction will be
consummated as presented above or at all.
3. In addition, as detailed in note 5(2) of the annual financial
statements as of December 31, 2022, the Company has submitted with
the International Centre for Settlement of Investment Disputes
("ICSID") a Request for Arbitration (the "Request") against Romania
for compensation of losses incurred due to failure of the Romanian
authorities to cooperate, negotiate and adjust the PPP agreement as
described in the note 5(1)(c) of the annual financial statements as
of December 31, 2022 which
NOTE 1: - CORPORATE INFORMATION (Cont.)
include the Company's investment in the Project SPV, loss of
potential profit, and costs and expenses of the arbitration.
At this early stage there is no certainty about the result of
the dispute, hence no resources are expected to be available in the
foreseeable future.
As of June 30, 2023, the Company is not in compliance with the
main Covenants as defined in the restructuring plan (for more
details refer also to Note 8 of the annual financial statements as
of December 31, 2022), hence under defaulted which could also
trigger early repayment clause by the bondholders.
Due to the abovementioned and due to the board and management
estimation that the Company is unable to serve its entire debt on
the Current Due Date, the Company intends to request the
bondholders of both series an additional postponement of the
repayment of the remaining balance of the bonds. However, there is
an uncertainty if the bondholders will approve the request. 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
basis.
Due to the abovementioned conditions a material uncertainty
exists that casts significant doubt about the Company's ability to
continue as a going concern.
The interim condensed 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.
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, 2023 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 consolidated financial statements as of 31 December
2022. These interim condensed consolidated financial statements as
of June 30, 2023 have been neither audited nor reviewed by the
Company's auditors.
The financial information for the half year ended 30 June 2022
has neither been audited nor reviewed by the auditors.
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 of and for the
year ended December 31, 2022.
The interim condensed consolidated financial statements as of
June 30, 2023 were authorized by the Board of Directors on 31
August 2023.
NOTE 2: - BASIS OF PREPARATION (Cont.)
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
2022, except for
the adoption of new standards effective as of 1 January 2023.
The Group has not early adopted any other standard, interpretation
or amendment that has been issued but is not yet effective.
Amendment to IAS 8, "Accounting Policies, Changes to Accounting
Estimates and Errors":
In February 2021, the IASB issued an amendment to IAS 8,
"Accounting Policies, Changes to Accounting Estimates and Errors"
("the Amendment"), in which it introduces a new definition of
"accounting estimates".
Accounting estimates are defined as "monetary amounts in
financial statements that are subject to measurement uncertainty".
The Amendment clarifies the distinction between changes in
accounting estimates and changes in accounting policies and the
correction of errors.
The Amendment is to be applied prospectively for annual
reporting periods beginning on or after January 1, 2023 and is
applicable to changes in accounting policies and changes in
accounting estimates that occur on or after the start of that
period. Early application is permitted.
The application of the Amendment did not have a material impact
on the Company's interim financial statements.
Amendment to IAS 12, "Income Taxes":
In May 2021, the IASB issued an amendment to IAS 12, "Income
Taxes" ("IAS 12"), which narrows the scope of the initial
recognition exception under IAS 12.15 and IAS 12.24 ("the
Amendment").
According to the recognition guidelines of deferred tax assets
and liabilities, IAS 12 excludes recognition of deferred tax assets
and liabilities in respect of certain temporary differences arising
from the initial recognition of certain transactions. This
exception is referred to as the "initial recognition exception".
The Amendment narrows the scope of the initial recognition
exception and clarifies that it does not apply to the recognition
of deferred tax assets and liabilities arising from transactions
that are not a business combination and that give rise to equal
taxable and deductible temporary differences, even if they meet the
other criteria of the initial recognition exception.
The Amendment applies for annual reporting periods beginning on
or after January 1, 2023, with earlier application permitted. In
relation to leases and decommissioning obligations, the Amendment
is to be applied commencing from the earliest reporting period
presented in the financial statements in which the Amendment is
initially applied. The cumulative effect of the initial application
of the Amendment should be recognized as an adjustment to the
opening balance of retained earnings (or another component of
equity, as appropriate) at that date.
NOTE 2: - BASIS OF PREPARATION (Cont.)
The application of the Amendment did not have a material impact
on the Company's interim financial statements.
Amendment to IAS 1 - Disclosure of Accounting Policies:
In February 2021, the IASB issued an amendment to IAS 1,
"Presentation of Financial Statements" ("the Amendment"), which
replaces the requirement to disclose 'significant' accounting
policies with a requirement to disclose 'material' accounting
policies. One of the main reasons for the Amendment is the absence
of a definition of the term 'significant' in IFRS whereas the term
'material' is defined in several standards and particularly in IAS
1.
The Amendment is applicable for annual periods beginning on or
after January 1, 2023. Early application is permitted.
The application of the Amendment did not have a material impact
on the Company's interim financial statements.
c. Disclosure of new standards in the period prior to their adoption:
Amendment to IFRS 16, "Leases":
In September 2022, the IASB issued an amendment to IFRS 16,
"Leases" ("the Amendment"), which provides guidance on how a
seller-lessee should measure the lease liability arising in a sale
and leaseback transaction with variable lease payments that do not
depend on an index or rate. The seller-lessee has to choose between
two accounting policies for measuring the lease liability on the
inception date of the lease. The accounting policy chosen must be
applied consistently.
The Amendment is applicable for annual periods beginning on or
after January 1, 2024. Early application is permitted. The
Amendment is to be applied retrospectively.
The Company is evaluating the effects of the Amendment on its
financial statements.
NOTE 3: - USE OF JUDGEMENT AND ESTIMATES
In preparing this interim condensed consolidated 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 interim condensed consolidated 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, 2022, save for the changes highlighted
above. Refer also to Note 1(b) above for significant estimations
performed.
NOTE 4: - 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.
Carrying amount Fair value
------------------------ -----------------------
June 30, December June 30, December
31, 31
2023 2022 2023 2022
------------- --------- ------------- --------
Not audited Not audited
Not reviewed Audited Not reviewed Audited
------------- --------- ------------- --------
EUR '000 EUR '000 EUR '000 EUR
'000
------------- --------- ------------- --------
Statement of financial
position
Debentures A - Israeli NIS
bonds 38,998 40,755 2,933 4,007
Debentures B - Israeli NIS
bonds 55,484 57,983 4,656 6,154
The total contractual liability of the Debentures was EUR 127.6
million as of June 30, 2023.
NOTE 5: - CASA RADIO
a. Following Note 5(1)(c) to the annual financial statements
relating the discussions with the Romanian authorities, there have
been no significant events since the publication of the annual
financial statements as of December 31, 2022.
b. Following Note 5(1)(e) to the annual consolidated financial
statements as of December 31, 2022 which discloses that the The
Company and AFI Europe N.V. ("AFI Europe") entered into an addendum
to the pre-sale agreement entered into between the Parties in
connection with the sale of its subsidiary (the "SPV") which holds
75% in the Casa Radio Project (the "Project") (the "Addendum" and
the "Agreement", respectively) pursuant to which the Parties agreed
to extend the Long Stop Date, which is the date on which the
parties will execute a share purchase agreement, subject to the
satisfaction of conditions precedent (the "SPA"), until December
31, 2023.
Following the above, the Parties continue their attempts to
receive the authority's approval in order to be able to execute the
SPA, still there has been no progress since the pre-sale has been
signed. In light of the above the Company is exploring all its
options in order to obtain progress, including among others its
legal options. For details regarding the issuance of a notice of
dispute and acceptance of offer and consent to arbitrate to Romania
with respect to the "Casa Radio" project refer to Note 5(2).
Accordingly, on April 6, 2023 the Company filed its Memorial and
supporting evidence at the International Centre for the Settlement
of Investment Disputes, setting out its claims against Romania.
Further, on May 18, 2023 the Company submitted its objection to
Romania's Request for Bifurcation into separate phases on
jurisdiction and the merits. The Company announces that Romania's
application has been rejected and it has now been determined that
the Arbitration will not be bifurcated. Romania is now required to
file its defence to the Company's claims.
Due to the above, there can be no certainty that the SPA will
eventually be executed and/or that the transaction will be
completed.
NOTE 5: - CASA RADIO (Cont.)
c. Write-down of trading properties:
As detailed in the annual consolidated financial statements, the
value of the trading property of the Project was fully reduced (for
more details refer to Note 5(2) to the annual consolidated
financial statements as of December 31, 2022).
Still, the Company believes that despite this reduction there is
no change in the value of the Company's rights under the PPP
Agreement. In addition, management, believes that in case they will
decide to pursue it material economic damage, the Company has a
good case to claim compensation for such damages.
NOTE 7:- MATERIAL EVENTS DURING THE REPORTING PERIOD
a. Update regarding a change in Elbit Imaging Ltd holdings
Since announcement dated January 13, 2022 and up to last
announcement dated July 13, 2023 Elbit Imaging sold about 48,6
thousand shares of the Company for a total consideration of
approximately NIS 76 thousand, thus, Elbit Imaging holdings in the
Company have diminished to 19.85% of the Company's issued and
paid-up capital.
b. Tax authority investigation:
On March 27, 2023 the Company announced that the Tax Authority
of the state of India initiated certain actions at the office of
Elbit Plaza India Management Services Private Limited (which is a
private company wholly owned by Elbit Plaza India Real Estate
Holdings Limited) (hereinafter: "EPM") including a search and
seizer of certain documents relating to EPM's
activities/transactions in India in recent years. At this stage it
is not yet clear what the purpose of the investigation is,
including whether EPM is the purpose of the
investigation or whether the investigation is related to any
third party.
c. Dutch statutory auditor
Following Note 16(b)(6) to the annual consolidated financial
statements as of December 31, 2022, which discloses statutory
filing requirements, the Company submitted the annual consolidated
financial statements as of December 31, 2022 which were filed to
the London Stock Exchange, the Warsaw Stock Exchange and the Tel
Aviv Stock Exchange, to the Authority for the Financial Markets and
to other relevant Dutch authorities.
d. Deferral of payment of Debentures and partial interests' payment
As previously disclosed by the Company in Note 8(c) to its
annual consolidated financial statements as of December 31, 2022,
the Company was not able to meet its final redemption obligation to
its (Series A and Series B) bondholders, due on July 1, 2023. In
light of the above the bondholders approved to postpone the final
redemption date to January 1, 2024 .
e. Update regarding a lawsuit against entities involved in the
sale of U.S.A shopping centers in 2011
On June 19, 2023 the Company announced, further to its
announcements, regarding the filing of a lawsuit by the Company and
Elbit Imaging Ltd. ("Elbit") against certain parties (certain
officers of the Company and Elbit, a portion of the heirs of the
late Mr. Motti Zisser (the Company's and Elbit's former controlling
shareholder) and other parties) (the
NOTE 7:- MATERIAL EVENTS DURING THE REPORTING PERIOD (cont.)
"Respondents") who were involved in a transaction of the Company
and Elbit for the sale of real estate properties in the U.S.A. in
2011 and for which funds (brokerage fees) were allegedly illegally
transferred to private companies controlled by the late Mr. Motti
Zisser (the "Lawsuit"); and further to the Company's announcement
dated August 10, 2021 and to the details provided in Note 16(b)(5)
in the Company's annual consolidated financial statements for the
year 2022 regarding the approval by the District Court of an
application submitted by one of the respondents, Mr. Philip Meyer,
for the dismissal in limine of the Lawsuit and the appeal submitted
by the Company and Elbit to the Supreme Court on November 14, 2021;
and further to the Company's announcement dated May 31, 2023
regarding the fact that the Company's and Elbit's appeal was
accepted by the Supreme Court; the Company hereby announces that a
settlement agreement has been reached between the plaintiffs and
two of the Respondents. The court approved the settlement agreement
and gave it the effect of a judgment and imposed a publication ban
on its details. According to the provisions of the settlement
agreement, the Company's
portion after deducting expenses is a few hundred thousand euros
and should be received over a period of several months, and the
Company and Elbit will continue to handle the legal proceeding in
the District Court while each party shall maintain all of its
claims in the main proceeding.
NOTE 8 : - SUBSEQUENT EVENTS
a. Annual General Meeting
On July 20, 2023 the Company announced, that Annual General
Meeting of the Company's shareholders ("AGM") scheduled to take
place on August 9, 2023 is postponed to take place on November 6,
2023 at the offices of the Company.
b. Update regarding a change in Elbit Imaging Ltd holdings
For the details regarding please refer to the Note 7(a).
c. Update regarding submission of a request for arbitration
against Romania with respect to the "Casa Radio" project
On July 12, 2023, Plaza and Dambovita Center SRL (a subsidiary
of Plaza and the Project Company in charge of the Casa Radio
Project) received a notice of default from the Ministry of Finance
under the public-private partnership contract governing the Casa
Radio Project. The Company denies all claims formulated by the
Ministry of Finance, including any made in the ongoing ICSID
arbitration with Romania.
- - - - - - - - - -
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END
IR SDSFLFEDSEIA
(END) Dow Jones Newswires
August 31, 2023 10:53 ET (14:53 GMT)
Plaza Centers N.v (LSE:PLAZ)
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