TIDMPLAZ
RNS Number : 2928K
Plaza Centers N.V.
31 August 2021
31 August 2021
PLAZA CENTERS N.V.
RESULTS FOR THE SIX MONTHSED 30 JUNE 2021
Plaza Centers N.V. ("Plaza" / "Company" / "Group") today
announces its results for the six months ended 30 June 2021. The
financial information for the half year ended 30 June 2021 and 30
June 2020 has neither been audited nor reviewed by the
auditors.
Financial highlights:
-- Reduction in total assets by EUR1.5 million to EUR11 million
mainly as a result of the decrease in Equity accounted investees as
detailed below, administrative expenses and costs of
operations.
-- Consolidated cash position as of June 30, 2021 decreased by
circa EUR0. 7 million to app. EUR 1 million (December 31, 2020:
EUR1.7 million) and current cash position of circa EUR5.16
million.
-- EUR1.5 million loss recorded at an operating level (June 30,
2020: EUR1.8 million loss) mainly due to share in results of equity
accounted investees and administrative expenses.
-- General & Administrative Expenses reduced to EUR0.4
million in 2021 due to cost cutting of professional services and
manpower (June 30, 2020: EUR0.5 million).
-- Recorded loss of EUR9 million (June 30, 2020: EUR7.3
million), mainly due to finance expenses on bonds.
-- Basic and diluted loss per share of EUR1.31 (30 June 2020: loss per share of EUR1.07).
Impact of the Covid-19
The Covid-19 global health and economic crisis affected
Company's operational activity during the year 2020 and the first
half of 2021. The impact of the effect of the COVID 19 included a
write off of one of its assets (refer to Note 6(1)). In addition,
the COVID 19 effect caused Elbit Plaza India Real Estate Holdings
Limited (a subsidiary held by the Company (50%) and Elbit Imaging
Ltd. (50%)) ("EPI") to postpone the closing of the sale of 100%
stake in the SPV which owns 74.7 acre plot in Chennai (subsidiary
of EPI) (refer to Note 6(2)). The COVID 19 also partly delayed the
legal procedures against the purchaser of the SPV which owns the
plot in Bangalore India (refer to Note 6(1)).
Other than the above mentioned, at this stage, the Company is
not able to estimate the full future impact of COVID 19. However,
the Company believes that the pandemic will still continue
effecting real estate market for quite some time. The Company
assumes the demand of interested buyers is expected to be smaller,
which can have a material impact on the ability of the Company to
complete the sale of the plots it owns.
Material events during the period:
Sale agreement of plot in Bangalore, India:
Regarding the criminal cases filed for dishonour of the cheques
which were given as security for payment of certain instalments
refer to Note 6 (1) in the interim condensed consolidated financial
statements as of June 30, 2021.
Until the approval of the financial statements the Purchaser
paid to EPI approximately INR 87.00 crores (EUR 11.2 million)
(Company part INR 43.5 crores (approximately EUR 5.6 million)) out
of a total consideration of INR 356 crores (approximately EUR 42
million) (Plaza part INR 178 crores (approximately EUR 21 million)
the SPV should have been received as of the said date as per the
Agreement.
At this stage, there is no clarity on payment of the remaining
amount based on the Agreement. Accordingly, the Company is taking
necessary steps to protect its interest, including submitting an
appeal before the National Company Law Appellate Tribunal, Chennai,
India against the decision of the National Company Law Tribunal,
Bengaluru, India, which dismissed the insolvency proceedings
initiated against the Purchaser for the recovery of the amounts
due, and filing a motion with court in order to collect checks
given by the Partner to secure payments under the transaction, but
were dishonoured.
Sale agreement of plot in Chennai, India:
Following Note 6(b)(2) to the annual consolidated financial
statements as of December 31, 2020 regarding the agreement (the
"SPA") between Elbit Plaza India Real Estate Holdings Limited (a
subsidiary held by the Company (50%) and Elbit Imaging ltd.(50%))
("EPI") and the purchaser (the "Purchaser") for the sale of 100%
stake in the SPV (subsidiary of EPI) which owns 74.7 acre plot in
Chennai, India, for a total consideration of INR 96.5 crores
(approximately EUR 11.2 million), the Purchaser completed the
transaction and paid a consideration of INR 94.7 crores
(approximately EUR 10.6 million). The change in the consideration
is due to the Purchaser's consent to take some additional
liabilities in connection with the SPV (which were not included in
the original agreement with the Purchaser).
As stated above, Plaza is entitled to receive 50% of the
transaction's compensation. Accordingly, so far Plaza received, in
practice, advanced payments in a total consideration of EUR 1.05
million, following which, upon completion of the transaction, the
company received an additional consideration of approximately EUR
4.25 million. Furthermore, Plaza and Elbit Imaging Ltd granted the
Purchaser an indemnification, jointly and severally, for some of
EPI's presentations, which are presentations customary in such
transactions.
Update regarding a change in Elbit Imaging Ltd holdings
In the period since January 11, 2021 and up to August 4, 2021,
the Company announced that since August 5, 2020 and up to the last
announcement, Elbit Imaging Ltd. ("Elbit Imaging") sold about 1,469
thousand shares of the Company, which are held in escrow account,
for a total consideration of approximately NIS 1,233 thousand,
thus, Elbit Imaging holdings in the Company have diminished from
44.9% to 23,5% 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(d) in the interim condensed consolidated
financial statements as of June 30, 2021.
Annual General Meeting:
Annual general meeting of the Shareholders of the Company was
held on June 30, 2021, all the proposed resolutions were
passed.
Key highlights since the period end:
Information regarding proposals from G.C. Hevron Capital Ltd,
L.I.A Pure Capital Ltd and Zero One Capital Ltd:
In the period since July 9, 2021 till August 10, 2021, the
Company received proposals from G.C. Hevron Capital Ltd ("Hevron
Capital"). According to revised proposal received on August 10,
2021 the Company's assets will be transferred to a trustee and/or
will be managed exclusively for the benefit of the bondholders, in
order to create a mechanism according to which the bondholders will
exclusively benefit from any expected income from the existing
assets.
On July 21, 2021 the Company received additional proposal from
L.I.A. Pure Capital Ltd. to purchase shares of the Company, as a
publicly-traded shell company.
On July 30, 2021 the Company received additional proposal from
Zero One Capital Ltd to preserve the Company's existing assets in
favor of the Company's bondholders and other interested persons and
simultaneously to enable to flow new activity.
All proposals were discussed on bondholders meeting which was
held on August 1, 2021. Following this bondholders meeting, an
additional bondholders meeting was held on August 11, 2021, in
which the bondholders decided to approve that the Company's Board
of Directors can conduct a negotiation with G.C. Hevron Capital Ltd
regarding the sale of the Company's public structure and to grant a
no shop for a period of 60 days during which due diligence will be
carried out by G.C. Hevron Capital Ltd and its advisors .
Commenting on the results, executive director Ron Hadassi
said:
"Our active focus has continued to centre on asset disposals,
accordingly we have managed to execute the sale of our project in
Chennai, India following which the company received an amount of
approximately EUR 4.25 million, in addition the Company is
continuing its efforts to realize the transaction in Bangalore,
India; in connection with Casa Radio Project, we are still trying
to renegotiate the PPP Agreement with the Public Authority.
Subsequent to this renegotiation process, a Government Ordinance is
needed in order to confirm the transfer of the shares to AFI Europe
N.V. as well as amendment of the PPP Agreement in line with the
agreement signed with AFI Europe N.V .
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 2021 the management's focus has been on
executing of cash proceeds on signed SPA for the sale of Chennai
project in India. In the Bangalore project the Company together
with Elbit continued to protect its interest in the project,
including by filling an appeal before the National Company Law
Appellate Tribunal, Chennai, India against the decision of the
National Company Law Tribunal, Bengaluru, India, which dismissed
the insolvency proceedings initiated against the Purchaser for the
recovery of the amounts due (refer also to Note 6(1)). The Company
also continued the disposals of plots of land in CEE and cost
reductions and partial repayments to its bondholders.
In addition, Following Note 5(3)(f) to the annual consolidated
financial statements as of December 31, 2020 which discloses that
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, 2021.The addendum was approved by the bondholders meeting held
on November 12, 2020. 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.
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, 2022) 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 EUR9 million
loss attributable to the shareholders of the Company (30 June 2020:
EUR 7.3 million). The losses were mainly from the Finance costs
which were increased to EUR7.5 million in 2021, from EUR5.5 million
in 2020 mainly due to interests' expenses accrued on the debentures
(partly due to penalty interest calculated on the deferred
principal).
Total result of operations excluding finance costs was loss of
EUR1.5 million in 2021 compared to reported loss of EUR1.8 million
in the first half of 2020, mainly due share in result of equity
accounted investees and administrative expenses.
The consolidated cash position (cash on standalone basis as well
as fully owned subsidiaries) as of 30 June 2021 was EUR0.95 million
(31 December 2020: EUR1.7 million) and current cash position of
circa EUR5.16 million.
Liquidity & Financing
Plaza ended the period with a consolidated c ash position of
circa EUR0.95 million, compared to EUR1.7 million at the end of
2020.
As of June 30, 2021, the Group's outstanding obligation to
bondholders (including accrued interests) are app. EUR105.1
million.
As disclosed Note 7(e) below the Company was not able to meet
its final redemption obligation to its (Series A and Series B)
bondholders, due on July 1, 2021, and on April 12, 2021, the
bondholders 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 scheduled Interest
payment.
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 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.
Strategy and Outlook
The Company's priorities are focused on efforts to sign
definitive sale agreement of Casa Radio project, getting further
proceeds for Bangalore. 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
Over the course of the year to date, Plaza has continued to make
progress against its operational and strategic objectives. 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)
------------ --------------------- ----------------- ----------- -------------------
Amended revised
Bangalore, agreement
Bangalore India Residential Scheme 218,500 50 in place
------------ --------------------- ----------------- ----------- -------------------
FINANCIAL REVIEW
Results
In 2021, the administrative expenses amounted to EUR0.42
million, a decrease compare to EUR0.45 million in the first half of
2020. The decrease was a result of a further scale down of the
Company's activities, mainly in respect of salaries and related
expenses and professional services.
The 2020 write down of trading properties amounted to EUR2.4
million relates to write down of Casa Radio property value.
Finance income of EUR0.6 million in the first 6 months of 2020
was mainly due to foreign exchange movements on the debentures,
which did not occur in the period of 6 months ended June 30,
2021.
Finance costs increased from EUR6.1 million to EUR7.5 million
(30 June 2020 and 30 June 2021, respectively). The main components
were:
-- Foreign exchange movements (NIS-EUR) - EUR3 million for 6
months of 2021 (30 June 2020 - income on foreign exchange
movements).
-- Interest expenses booked on all series of bonds totalled
EUR4.4 million (30 June 2020 - EUR 3.6 million expenses
recorded).
-- No expenses recorded associated with amortization of discount
on debentures for 6 months of 2020 (30 June 2020 - EUR2.5 million
expenses recorded).
In 2020 and 2021 there were no tax benefit or expenses.
As a result, the loss for the period amounted to circa EUR9
million in 6 months of 2021, representing a basic and diluted loss
per share for the period of EUR1.31 (H1 2020: EUR1.07 loss).
Balance sheet and cash flow
The balance sheet as of 30 June 2021 showed total assets of
EUR11 million compared to total assets of EUR12.5 million at the
end of 2020 , mainly as a result of administrative expenses and
costs of operations and decrease in Equity accounted investees
.
The consolidated cash position (cash on standalone basis as well
as fully owned subsidiaries) as of 30 June 2021 decreased to
EUR0.95 million (31 December 2020: EUR1.7 million).
The value of the Company's trading properties remained nil as of
30 June 2021 comparing to the value as of 31 December 2020 as a
result of full reduction of the value of the Casa Radio project,
Romania in 2020.
Investments in equity accounted investee companies has decreased
by EUR0.95 million to circa EUR9.8 million (31 December 2020:
EUR10.7 million) mainly as a result of write down in trading
properties.
As of 30 June 2021, Plaza has a balance sheet liability of
EUR89.95 million from issuing bonds on the Tel Aviv Stock Exchange.
Additionally, Plaza recorded provision for interests on bonds as of
June 30, 2021, in an amount of EUR15.17 million (31 December 2020:
EUR10.7 million).
As detailed above, due to the decrease of the full value of Casa
Radio project (Bucharest Romania), the provision created with
respect to the obligation connected to Casa Radio project (for the
construction of the Public Authority Building) was reversed in the
amount of EUR15.8 million as of 31 December, 2020.
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) as well as the default of purchaser of
Bangalore project to meet payments schedule according to the signed
amendment agreement (refer to Note 6 (1)), the board and management
estimates that the Company is unable to serve its entire debt
according to the due date the bond holders 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 (refer to Note
16(b)(9) of the consolidated financial statements as of December
31, 2020), 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.
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 7-12/2021 2022
Cash - Opening Balance (2) 0.95 2.73
Proceeds from sales transactions, price
adjustments (3) 0.2 -
Cashflow from equity companies in India
(4) 4.18 -
Total Sources 5.33 2.73
Debentures - principal - -
Debentures - interest (5) - -
Other operational costs (6) 2 1
Operating costs (7) - 0.28
G&A expenses (8) 0.6 1.1
Total Uses 2.6 2.38
Cash - Closing Balance (2) 2.73 0.35
1. The above cash flow is subject to the approval of the
bondholders of both series to postponement of the repayment of the
remaining balance of the bonds which are due on January 1, 202 2
.
2. Total cash balances as of June 30, 2021 on standalone basis
as well as fully owned subsidiaries.
3. Proceeds in the amount of EUR 0.20 million from for the sale
of receivables to a third party, regarding an advanced payment for
the purchase of a Czech project company which Plaza Centers Czech
Republic s.r.o, a wholly owned subsidiary of the Company, paid in
the past.
4. The proceeds detailed in 202 1 includes the net amounts the
company received following the execution of the plot in Chennai,
India (refer to Note 6(2)).
5. Due to the uncertainty relating the Uses of the Company, the
Company didn't include any payment to the bond holders in the cash
flow.
6. The cost includes a provision for arbitrations / legal costs .
7. Includes property maintenance (taxes, security, energy and other).
8. Total general and administrative includes both cost of the
Company and of all the subsidiaries.
9. Following Note 5(3)(f) to the annual consolidated financial
statements as of December 31, 2020 which discloses that 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, 2021.The addendum was approved by the bondholders meeting held
on November 12, 2020.
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.
Due to the above, the Company didn't include any proceeds from
the above mentioned SPA as there can be no certainty that the SPA
will eventually be executed and/or that the transaction will be
completed
10. The Company didn't include any proceeds from its holding in
an indirect subsidiary (50%) which holds a property in Bangalore,
India due to the recent default of purchaser of Bangalore project
to meet payments schedule according to the signed amendment
agreement (as detailed in Note 6(1)) as there can be no certainty
that the agreement will be completed, hence no resources are
expected to be available in forceable future at this time.
Ron Hadassi
Executive Director
31 August 2021
PLAZA CENTERS N.V.
INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF JUNE 30, 2021
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 - 18
- - - - - - - - - - -
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL
POSITION
December
June 30, 31,
2021 2020
------------- --------
EUR '000 EUR '000
Not audited Audited
Not reviewed
ASSETS
Cash and cash equivalents 952 1,709
Prepayments and other receivables 300 90
Total current assets 1,252 1,799
------------- --------
Trading properties - -
Equity accounted investees 9,785 10,737
Total non-current assets 9,785 10,737
------------- --------
Total assets 11,037 12,536
============= ========
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,
2021 2020
------------- ---------
EUR '000 EUR '000
Not audited Audited
Not reviewed
LIABILITIES AND EQUITY
LIABILITIES AND SHAREHOLDERS' EQUITY
Bonds 89,952 87,137
Accrued interests on bonds 15,173 10,684
Trade payables 44 58
Other liabilities 347 409
------------- ---------
Total current liabilities 105,516 98,288
------------- ---------
Provisions - -
Total non-current liabilities - -
------------- ---------
Share capital 6,856 6,856
Translation reserve (31,068) (31,292)
Other reserves (19,983) (19,983)
Share based payment reserve 35,376 35,376
Share premium 282,596 282,596
Retained losses (368,256) (359,305)
------------- ---------
Total equity (94,479) (85,752)
------------- ---------
Total equity and liabilities 11,037 12,536
============= =========
The accompanying notes are an integral part of the interim
condensed consolidated financial statements.
August 31, 2021
--------------------- ------------------ ---------------------
Ron Hadassi David Dekel
Date of approval of Executive Director
the Chairman of the Board
financial statements of Directors
INTERIM CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS
Six months ended
June 30,
----------------------------
2021 2020
EUR '000 EUR '000
(except per (except per
share data) share data)
Not audited Not audited
Not reviewed Not reviewed
Revenues and gains
Revenue from disposal of trading properties - 1,452
------------- -------------
Total revenues - 1,452
Gains and other
Other income 125 20
------------- -------------
Total gains 125 20
------------- -------------
Total revenues and gains 125 1,472
------------- -------------
Expenses and losses
Cost of trading properties disposed - (580)
Cost of operations (37) (44)
Write-down of trading properties - (2,400)
Share in results of equity-accounted investees (1,142) 161
Administrative expenses (403) (437)
Other expenses (10) (17)
------------- -------------
Finance income - 626
Finance costs (7,484) (6,130)
------------- -------------
Total expenses and losses (9,076) (8,821)
------------- -------------
Loss before income tax (8,951) (7,349)
Income tax expense - -
------------- -------------
Loss for the period (8,951) (7,349)
============= =============
Earnings per share
Basic and diluted loss per share (in EURO) (1.31) (1.07)
============= =============
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,
----------------------------
2021 2020
------------- -------------
EUR '000 EUR '000
(except per (except per
share data) share data)
Not audited Not audited
Not reviewed Not reviewed
Loss for the period (8,951) (7,349)
Other comprehensive income
Items that are or may be reclassified to profit
or loss:
Foreign currency translation differences -
foreign operations (Equity accounted investees) 224 (799)
------------- -------------
Other comprehensive gain (loss) for the period 244 (799)
------------- -------------
Total comprehensive loss for the period (8,727) (8,148)
============= =============
The accompanying notes are an integral part of the interim
condensed consolidated financial statements.
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN
EQUITY
Share based
Share Share payment Translation Other Retained
capital Premium reserves Reserve reserves losses Total
-------- -------- ----------- ----------- --------- --------- --------
Balance on January 1, 2021 6,856 282,596 35,376 (31,292) (19,983) (359,305) (85,752)
-------- -------- ----------- ----------- --------- --------- --------
Comprehensive loss for
the period
Net loss for the period - - - - - (8,951) (8,951)
Foreign currency
translation
differences - - - 224 - 224
Total comprehensive loss
for the period - - - 224 - (8,951) (8,727)
-------- -------- ----------- ----------- --------- --------- --------
Balance on June 30, 2021
(Not audited, not
reviewed) 6,856 282,596 35,376 (31,068) (19,983) (368,256) (94,479)
-------- -------- ----------- ----------- --------- --------- --------
Share based
Share Share payment Translation Retained
capital Premium reserves Reserve Other reserves losses Total
-------- -------- --------------- ----------- -------------- --------- --------
Balance on
January 1, 2020 6,856 282,596 35,376 (29,677) (19,983) (325,815) (50,647)
-------- -------- --------------- ----------- -------------- --------- --------
Comprehensive
loss for
the period
Net loss for the
period - - - - - (7,349) (7,349)
Foreign currency
translation
differences - - - (799) - - (799)
-------- -------- --------------- ----------- -------------- --------- --------
Total
comprehensive
loss
for the period - - - (799) - (7,349) (8,148)
Balance on June
30, 2020
(Not audited,
not reviewed) 6,856 282,596 35,376 (30,476) (19,983) (333,164) (58,795)
-------- -------- --------------- ----------- -------------- --------- --------
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,
----------------------------
2021 2020
------------- -------------
EUR '000 EUR '000
Not audited Not audited
Not reviewed Not reviewed
Cash flows from operating activities:
Loss for the period (8,951) (7,349)
Adjustments necessary to reflect cash flows used
in operating activities
Net finance costs 7,484 5,504
Share of loss of equity-accounted investees 1,142 (161)
(325) (2,006)
------------- -------------
Changes in:
Trade receivables (14) 2
Other receivables (196) 51
Trading properties - 2,950
Trade payables (14) 70
Other liabilities, related parties' liabilities
and provisions (62) (227)
------------- -------------
(286) 2,846
------------- -------------
Interest paid (125) (499)
Net cash used in operating activities (736) 341
------------- -------------
Cash from investing activities
Distribution received from equity accounted investees 34 1,145
Net cash provided by investing activities 34 1,145
------------- -------------
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,
-----------------------------------------------
2021 2020
------------------- --------------------------
EUR '000 EUR '000
Not audited Not audited
Not reviewed Not reviewed
Cash from financing activities
Repayment of debentures - -
Net cash used in financing activities - -
------------------- --------------------------
Effect of exchange fluctuations on cash held (55) -
Decrease in cash and cash equivalents during
the period (757) 1,486
Cash and cash equivalents as of January 1(st) 1,709 1,126
------------------- --------------------------
Cash and cash equivalents as of June 30 952 2,612
=================== ==========================
The accompanying notes are an integral part of the interim
condensed consolidated financial statements.
NOTES TO 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 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").
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, till December 19, 2018 when EUL informed that it
has signed a trust agreement according to which EUL will deposit
its shares of the Company with a trustee and no longer considers
itself to be the controlling shareholder of the Company (please
refer to Note 7(a) regarding the sale of 21.4% of the Company's
shares held by EUL).
b. Going concern and liquidity position of the Company :
As of June 30, 2021, the Company's outstanding obligations to
bondholders (including accrued interests) are app. EUR 105.1
million due date of which was postponed to January 1, 2022 (the
"Current Due date") (please refer to Note 7(e)).
Due to the above the Company's primary need is for liquidity.
The Company's current and future resources include the
following:
i. Cash and cash equivalents (including the cash of fully owned
subsidiaries) as of the date of approval of these condensed interim
consolidated financial statements the Company of approximately EUR
5.16 million (as of June 30, 2021 approximately EUR 0.9
million).
ii. 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, 2021. The addendum was approved by the bondholders
meeting held on November 12, 2020. 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.
iii. Following the default of purchaser of Bangalore project to
meet payments schedule according to the signed amendment agreement
(refer to Note 6(1)) there can be no certainty that the agreement
will be completed, hence at this time no resources are expected to
be available in forceable future.
NOTE 1: - CORPORATE INFORMATION (Cont.)
As of June 30, 2021, 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 statement as
of December 31, 2020), 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.
c. Impact of the Covid-19
The Covid-19 global health and economic crisis affected
Company's operational activity during the year 2020 and the first
half of 2021. The impact of the effect of the COVID 19 included a
write off of its assets (refer to Note 6(1)). In addition, the
COVID 19 effect COVID 19 also partly delayed the legal procedures
against the purchaser of the SPV which owns the plot in Bangalore
India (refer to Note 6(1)).
Other than the above mentioned, at this stage, the Company is
not able to estimate the full future impact of COVID 19. However,
the Company believes that the pandemic will still continue
effecting real estate market for quite some time. The Company
assumes the demand of interested buyers is expected to be smaller,
which can have a material impact on the ability of the Company to
complete the sale of the plots it owns.
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, 2021 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
2020. These interim condensed consolidated financial statements as
of June 30, 2021 have been neither audited nor reviewed by the
Company's auditors.
The financial information for the half year ended 30 June 2020
has neither been audited nor reviewed by the auditors.
Selected explanatory notes are, however, included to explain
events and transactions that
NOTE 2: - BASIS OF PREPARATION (Cont.)
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, 2020.
The interim condensed consolidated financial statements as of
June 30, 2021 were authorized by the Board of Directors on 31
August 2021.
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
2020, except for the adoption of new standards effective as of 1
January 2021. The Group has not early adopted any other standard,
interpretation or amendment that has been issued but is not yet
effective.
Amendments to IFRS 9, IFRS 7, IFRS 16, IFRS 4 and IAS 39:
In August 2020, the IASB issued amendments to IFRS 9, "Financial
Instruments", IFRS 7, "Financial Instruments: Disclosures", IAS 39,
"Financial Instruments: Recognition and Measurement", IFRS 4,
"Insurance Contracts", and IFRS 16, "Leases" ("the
Amendments").
The Amendments provide practical expedients when accounting for
the effects of the replacement of benchmark InterBank Offered Rates
(IBORs) by alternative Risk Free Interest Rates (RFRs).
Pursuant to one of the practical expedients, an entity will
treat contractual changes or changes to cash flows that are
directly required by the IBOR reform as changes to a floating
interest rate. That is, an entity recognizes the changes in
interest rates as an adjustment of the effective interest rate
without adjusting the carrying amount of the financial instrument.
The use of this practical expedient is subject to the condition
that the transition from IBOR to RFR takes place on an economically
equivalent basis.
In addition, the Amendments permit changes required by the IBOR
reform to be made to hedge designations and hedge documentation
without the hedging relationship being discontinued, provided
certain conditions are met. The Amendments also provide temporary
relief from having to meet the "separately identifiable"
requirement according to which a risk component must also be
separately identifiable to be eligible for hedge accounting.
The Amendments include new disclosure requirements in connection
with the expected effect of the IBOR reform on an entity's
financial statements, such as how the entity is managing the
process to transition to the IBOR reform, the risks to which it is
exposed due to the IBOR reform and quantitative information about
IBOR-referenced financial instruments that are expected to
change.
The Amendments are to be applied retrospectively for annual
periods beginning on or after January 1, 2021. Restatement of
comparative data for prior periods is not required.
The above Amendments are not expected to have a material impact
on the Company's interim financial statements.
c. Disclosure of new standards in the period prior to their adoption:
NOTE 2: - BASIS OF PREPARATION (Cont.)
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. Earlier application is permitted.
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, 2020, 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 and is classified as Level 1 in the fair
value hierarchy.
Carrying amount Fair value
------------------------ -----------------------
June 30, December June 30, December
31, 31
2021 2020 2021 2020
------------- --------- ------------- --------
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 37,128 35,996 6,473 5,887
Debentures B - Israeli NIS
bonds 52,824 51,171 9,809 7,086
The total contractual liability of the Debentures was EUR 105.1
million as of June 30, 2021.
NOTE 5 : - CASA RADIO
a. Following Note 5(3)(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, 2020.
b. Following Note 5(3)(f) to the annual consolidated financial
statements as of December 31, 2020 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, 2021.The addendum was approved by the bondholders meeting held
on November 12, 2020.
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.
Due to the above, there can be no certainty that the SPA will
eventually be executed and/or that the transaction will be
completed.
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(4) to the annual consolidated
financial statements as of December 31, 2020).
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.
On the other hand, if the Company comes to an understanding with
the Romanian authorities, it will measure the Casa Radio NRV to
reflect its updated financial projections.
NOTE 6 :- EQUITY ACCOUNTED INVESTEES
Material events and updates during the reporting period:
(1) Bangalore:
In March, 2008 Elbit Plaza India Real Estate Holdings Limited (a
subsidiary held by the Company (50%) and Elbit Imaging ltd.(50%))
("EPI") entered into a share subscription and framework agreement
(the "Agreement"), with a third-party local developer (the
"Partner"), and a wholly owned Indian subsidiary of EPI which was
designated for this purpose ("SPV"), to acquire together with the
Partner, through the SPV, up to 440 acres of land in Bangalore,
India (the "Project") in certain phases as set forth in the
Agreement.
As a result of the failure of the Partner to complete the
transaction under the Agreement and in accordance with the
provisions thereto, EPI has 100% control over the SPV and the
partner is no longer entitled to receive the 50% shareholding.
NOTE 6 :- EQUITY ACCOUNTED INVESTEES (Cont.)
The Partner has surrendered sale deeds to the SPV for
approximately 54 acres (the "Plot"). In addition, under the
Agreement the Partner has also been granted with 10% undivided
interest in the Plot and have also signed a Joint Development
Agreement with the SPV in respect of the Plot.
On December 2, 2015 EPI has signed an agreement to sell 100% of
its interest in the SPV to the Partner (the "Sale Agreement"). The
total consideration upon completion of the transaction was INR 321
crores (approximately EUR 36.3 million) which should have been paid
no later than September 30, 2016 ("Long Stop Date"). On November
15, 2016, the Partner informed EPI that it will not be able to
execute the aforesaid payment.
As a result of the foregoing, the SPV has received from the
escrow agent the sale deeds in respect of additional 8.7 acres (the
"Additional Property") which has been mortgaged by the Partner in
favor of the SPV in order to secure the completion of the
transaction on the Long Stop Date. The Additional Property has not
yet been registered in favor of the SPV for cost-benefit reasons.
In addition, as per the Sale Agreement, the Company took actions in
order to get full separation from the Partner with respect to the
Plot and specifically the execution of the sale deed with respect
of the 10% undivided interest, all as agreed in the Sale
Agreement.
In light of the above, and after lengthy negotiations between
the parties, new understandings were formulated and the parties
signed a revised agreement that substantially altered the outline
of the original transaction (and this agreement was amended several
more times, the last of which in April 2019), and concluded that:
(i) the closing date for the transaction will be extended to
November 2019, and may be further extended to August 2020 (the
"Closing Date"). It should be clarified that the postponement of
the closing date to November 2019 and August 2020 was subject to
receipt of payments as agreed in the Sale Agreement and subject to
mutually agreed payment terms; and (ii) the consideration was
increased to INR 356 crores (approximately EUR 40.2 million) (Plaza
part approximately EUR 20.1 million) (the "Consideration").
After August 2019, the Partner was unable to pay any further
amounts nor was able to give firm commitment on payment of the
remaining amount. In the absence of clarity on payment of the
remaining amount and failure of the Partner to give full separation
with respect to the Plot, on January 10, 2020, the Company
announced that a notice has been issued to the Partner to file its
response in the insolvency proceedings initiated for the recovery
of the amounts due . On May 18, 2021, the Company announced that
the insolvency proceedings initiated against the Purchaser for the
recovery of the due amounts has been dismissed by the National
Company Law Tribunal in Bangalore since the case is not
maintainable before it and therefore the SPV should claim for the
recovery of its debt or for the resolution of its dispute in any
other forum.
On July 29, 2021 the Company announced that the SPV has
submitted an appeal before the National Company Law Appellate
Tribunal, Chennai, India against the decision of the National
Company Law Tribunal, Bengaluru, India, which dismissed the
insolvency proceedings initiated against the Partner for the
recovery of the amounts due.
In addition, criminal cases for dishonor of the cheques
aggregating INR 15 crores which were given as security for payment
of certain installments, the Court had issued arrest warrants and
the local police were on the lookout for the accused persons. On
May 18, 2021, the Company announced that all the accused persons
appeared before the court and were granted bail. In addition, all
further proceedings continue in the matter.
NOTE 6 :- EQUITY ACCOUNTED INVESTEES (Cont.)
As of this date, the Partner paid to EPI approximately INR 87.00
crores (EUR 11.2 million) (Company part INR 43.5 crores
(approximately EUR 5.6 million)) out of a total consideration of
INR 356 crores (approximately EUR 42 million) (Plaza part INR 178
crores (approximately EUR 21 million) as per the Agreement.
Net realizable value measurement of Bangalore project
As for June 30, 2021 and December 31, 2020, the Group measured
the net realizable value of the project. The net realizable value
of the project based on the comparable Method is INR 183.9 crores
(App. EUR 20.8 million); 2020 - INR 198.3 crores (App. EUR 22.1
million). Due to decrease in value of the plot EPI recognized a
write off in the amount of app. EUR 1.3 million (the Company's part
(50%) app. EUR 0.65 million).
The evaluation Value in INR million Value in EUR million
method
Comparable Method 1,839 20.8
--------------------- ---------------------
DCF Method 1,834 20.4
--------------------- ---------------------
In light of the Company's intention to sell the Plot to the
Partner or to any other third party (see above), and in light of
the uncertainty as to the completion of the transaction with the
Partner, the Company believes that the comparable method reliably
reflects the net realizable value of the Plot and therefore the
Company recorded the value of the plot as of June, 2021 at the
value of INR 183.9 crores (EUR 20.8 million) (the Company's part
(50%) app. EUR 10.4 million).
The plot in Bangalore is still in land stage and therefore the
value of the plot has been derived using land comparable method.
The valuation of the property reflects the interest that the
partner still holds in the plot (10% as described above), the size
of the plot, impact of COVID pandemic, and the non-contiguous land
parcel and the petition/application filed with NCLAT against the
partner.
The following main parameters have been considered to arrive at
the land value of the subject property by land sale comparison
method:
Parameter Premium (Discount)
Applicable land value (INR Mn/acre) 95
-------------------
Total land value (INR Mn) 5,151
-------------------
Discount on account of Revised Master Plan
2015 Buffer zone norms (%) -25%
-------------------
Land Value after discount for RMP 2015 Buffer
zone Norms (INR Mn /acre) 71
-------------------
Presence of minority shareholder (partner) -20%
-------------------
Applicable Land Value after discount (INR
Mn /acre) 57
-------------------
Total land value (INR Mn) 3,091
-------------------
Discount on account of the insolvency petition/appeal
filed with NCLAT -30%
-------------------
Total land value (INR Mn) 2,163
-------------------
Marketability discount on account of COVID-19
situation -15%
-------------------
Total land value (INR Mn) 1,839
-------------------
NOTE 6 :- EQUITY ACCOUNTED INVESTEES (Cont.)
(2) Chennai:
Following Note 6(b)(2) to the annual consolidated financial
statements regarding the agreement (the "SPA") between Elbit Plaza
India Real Estate Holdings Limited (a subsidiary held by the
Company (50%) and Elbit Imaging ltd.(50%)) ("EPI") and the
purchaser (the "Purchaser") for the sale of 100% stake in the
SPV(subsidiary of EPI) which owns 74.7 acre plot in Chennai, India,
for a total consideration of INR 96.5 crores (approximately EUR
11.2 million), the Purchaser completed the transaction and paid a
consideration of INR 94.7 crores (approximately EUR 10.6 million).
The change in the consideration is due to the Purchaser's consent
to take some additional liabilities in connection with the SPV
(which were not included in the original agreement with the
Purchaser).
As stated above, Plaza is entitled to receive 50% of the
transaction's compensation. Accordingly, so far Plaza received, in
practice, advanced payments in a total consideration of EUR 1.05
million, following which, upon completion of the transaction, the
company received an additional consideration of approximately EUR
4.25 million. Furthermore, Plaza and Elbit Imaging Ltd granted the
Purchaser an indemnification, jointly and severally, for some of
EPI's presentations, which are presentations customary in such
transactions.
NOTE 7:- MATERIAL EVENTS DURING THE REPORTING PERIOD
a. Update regarding a change in Elbit Imaging Ltd holdings
In the period since January 11, 2021 and up to August 4, 2021,
the Company announced that since August 5, 2020 and up to the last
announcement, Elbit Imaging Ltd. ("Elbit Imaging") sold about 1,469
thousand shares of the Company, which are held in escrow account,
for a total consideration of approximately NIS 1,233 thousand,
thus, Elbit Imaging holdings in the Company have diminished from
44.9% to 23,5% of the Company's issued and paid-up capital.
b. Annual General Meeting
Annual general meeting of the Shareholders of the Company was
held on June 30, 2021, all the proposed resolutions were
passed.
c. Lawsuit against entities involved in the sale of U.S. shopping centres in 2011
Following Note 16(b)(5) to the annual consolidated financial
statements as of December 31, 2020, which discloses information
regarding the filing of a lawsuit by the Company and Elbit Imaging
Ltd. ("Elbit Imaging") against certain entities (certain officers
in the Company and in Elbit Imaging, a portion of the heirs of Mr.
Motti Zisser (the former controlling shareholder of the Company and
Elbit Imaging) and other parties) (the "Defendants") which were
involved in a transaction of the Company and Elbit Imaging which
was held in 2011 for the sale of real estate properties in the
U.S.A and for which funds (brokerage fees) were allegedly
transferred to private companies controlled by Mr. Motti Zisser
(the "Lawsuit"); that one of the Defendants request for dismissal
in limine of the Lawsuit which was filed against him, was accepted.
The Company and Elbit Imaging are examining the filing of an appeal
upon this court decision.
NOTE 7:- MATERIAL EVENTS DURING THE REPORTING PERIOD (Cont.)
d. Dutch statutory auditor
Following Note 16(b)(10) to the annual consolidated financial
statements as of December 31, 2020, which discloses statutory
filing requirements, the Company submitted the annual consolidated
financial statements as of December 31, 2020 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.
e. 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, 2020,
the Company was not able to meet its final redemption obligation to
its (Series A and Series B) bondholders, due on July 1, 2021. In
light of the above the company convened on June 7, 2021, in which
the bondholders approved to postpone the final redemption all the
scheduled Principal to January 1, 2022; that on July 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
scheduled Interest payment. The amount reflected 0.84% of accrued
interest as of that date .
f. Impact of the Covid-19
The Covid-19 global health and economic crisis affected
Company's operational activity during the year 2020 and the first
half of 2021. The impact of the effect of the COVID 19 included a
write off of its assets (refer to Note 6(1)). In addition, the
COVID 19 effect COVID 19 also partly delayed the legal procedures
against the purchaser of the SPV which owns the plot in Bangalore
India (refer to Note 6(1)).
Other than the above mentioned, at this stage, the Company is
not able to estimate the full future impact of COVID 19. However,
the Company believes that the pandemic will still continue
effecting real estate market for quite some time. The Company
assumes the demand of interested buyers is expected to be smaller,
which can have a material impact on the ability of the Company to
complete the sale of the plots it owns.
NOTE 8 : - SUBSEQUENT EVENTS
a. Information regarding proposals from G.C. Hevron Capital Ltd,
L.I.A Pure Capital Ltd and Zero One Capital Ltd
In the period since July 9, 2021 till August 10, 2021, the
Company received proposals from G.C. Hevron Capital Ltd ("Hevron
Capital"). According to revised proposal received on August 10,
2021 the Company's assets will be transferred to a trustee and/or
will be managed exclusively for the benefit of the bondholders, in
order to create a mechanism according to which the bondholders will
exclusively benefit from any expected income from the existing
assets.
On July 21, 2021 the Company received additional proposal from
L.I.A. Pure Capital Ltd. to purchase shares of the Company, as a
publicly-traded shell company.
On July 30, 2021 the Company received additional proposal from
Zero One Capital Ltd to preserve the Company's existing assets in
favor of the Company's bondholders and other interested persons and
simultaneously to enable to flow new activity.
NOTE 8 : - SUBSEQUENT EVENTS (Cont.)
All proposals were discussed on bondholders meeting which were
held on August 1, 2021 Following which an additional bondholders
meeting held on August 11, 2021 in which the bondholders decided to
approve to the Company's Board of Directors to conduct a
negotiation with G.C. Hevron Capital Ltd regarding the sale of the
Company's public structure and to grant a no shop for a period of
60 days during which due diligence will be carried out by G.C.
Hevron Capital Ltd and its advisors .
b. Lawsuit against entities involved in the sale of U.S. shopping centres in 2011
Please refer to the Note 7(c).
c. On August 10, 2021 the Company announced that Plaza Centers
Czech Republic s.r.o ("Plaza Centers CR"), a wholly owned
subsidiary of the Company, has signed an agreement for the sale of
its receivables to a third party, for a total consideration of EUR
200,000, regarding an advanced payment for the purchase of a Czech
project company which Plaza Centers CR paid in the past.
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END
IR SDEFWFEFSESA
(END) Dow Jones Newswires
August 31, 2021 13:10 ET (17:10 GMT)
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