Elbit Imaging Announces Signing Final Agreement for the Sale of Belgrade Plaza (Visnjicka) by Its Subsidiary, Plaza Centers
TEL AVIV, Israel, Jan. 26, 2017 (GLOBE NEWSWIRE) -- Elbit Imaging Ltd. (“EI” or the “Company”) (EMITF) (EMITF) announced today, in further to its announcement dated on November 3, 2016, that Plaza Centers N.V. ("Plaza") (PLAZ.L), an indirect subsidiary (45%) of the Company, has signed a binding share purchase agreement with BIG Shopping Centers Ltd., a publically traded company listed in the TA 100 Index (the “Purchaser”), for the sale of the Belgrade Plaza shopping and entertainment center.
Belgrade Plaza (Visnjicka) is currently the largest development underway in Serbia. The shopping center, which is currently over 90% pre-let, is on schedule to open in April 2017 and Plaza will remain responsible for the development and leasing of the asset until the opening.
Upon the completion of the transaction, which is expected during the upcoming month, Plaza will receive an initial advance payment of approximately Euro 28 million (plus customary NAV adjustments) from the Purchaser for the sale of 100% of the SPV’s shares, followed by further payments which will be subject to certain operational targets and milestones being met. The Purchaser will provide a guarantee to secure these future payments.
The final agreed value of Belgrade Plaza, which will comprise approximately 32,300 sqm of GLA, will be calculated based on a cap rate of 8.25% as well as the sustainable NOI after 12 months of operation, which Plaza estimates will be approximately Euro 7.2-7.5 million per annum. Further instalments will be due to Plaza during the first year of operation based on this 12 month figure. The NOI will be re-examined again after 24 months and 36 months of operation, which may lead to an upward adjustment of the final purchase price.
Plaza has a line of credit from a financing bank for the development of Belgrade Plaza to a maximum amount of €42.5 million. At least 75% of the net proceeds received from the disposal will be distributed to Plaza’s bondholders by or before March 31, 2017, and following receiving any future additional payments, in line with Plaza’s stated amended restructuring Plan.
