Israel's Elbit in loan refinancing agreement with Bank Hapoalim

By Caroline Salls

Pittsburgh, Dec. 30 - Elbit Imaging Ltd. entered into a definitive agreement with Bank Hapoalim BM following the receipt of required approval from its unsecured financial creditors, according to a company news release.

As a result, Elbit said the plan of arrangement condition that required it to reach an understanding with the bank was fulfilled.

The closing of the definitive agreement is subject the approval of the arrangement by the Tel-Aviv Jaffa District Court, the closing of the arrangement and other customary conditions.

As previously reported, the principal terms of the Bank Hapoalim loan refinancing include the following:

• Under an assignment by way of a pledge of loan proceeds in favor of the bank, the company is entitled to receive €9.36 million from a subsidiary of Park Plaza Hotels Ltd. by Dec. 31, and the bank will credit the proceeds in full on the account of the loan of the company.

Accordingly, the balance of the loan principal after payment of the assigned proceeds will be $47 million;

• The loan will bear interest at Libor plus 380 basis points, to be paid on a quarterly basis, plus 1.3%, which will accrue and be paid in a single installment on the maturity date of the loan principal;

• The loan principal will be repaid in a single installment at the third anniversary of the closing date of the arrangement;

• The bank will be allotted ordinary shares of the company. On the date the company issues shares and new series H and series I notes to unsecured financial creditors, it will issue to the bank 16.59 million ordinary shares, which will constitute 3% of the company's paid-up and issued capital.

If the company prepays the loan in full by 60 calendar days from the earlier of court approval of the arrangement and Dec. 31, the bank will not be entitled to receive the shares and will return them to the company without consideration.

If the company prepays the loan at any time during the period of 60 calendar days from the determination date through 150 calendar days from the determination date, the bank will return 8.42 million of the shares without consideration.

If the company prepays the loan at any time after 150 calendar days from the determination date, the bank will be entitled to keep all of the shares; and

• The bank will extend the existing credit line and standby letter of credit of Elbit Fashion Ltd. until Dec. 31, 2014.

Tel Aviv-based Elbit Imaging is a holding company with activities in the fields of commercial and entertainment centers, hotels, image-guided treatment, residential real estate and fashion retail.

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