Elbit unit Plaza Centers proposes changes to 2014 restructuring plan

By Caroline Salls

Pittsburgh, Nov. 7 – Elbit Imaging Ltd. announced proposed amendments to the 2014 restructuring plan for its Plaza Centers NV indirect subsidiary.

According to a news release, under the restructuring plan, principal payments on the notes issued by Plaza 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.

Elbit said the restructuring plan further provides that, if Plaza does not prepay at least NIS 434 million on the principal of the notes by Dec. 1, the principal payments due under the extended repayment schedule will be advanced by one year.

Since the restructuring plan took effect, the company said Plaza has made early prepayments of NIS 142.5 million and repaid a total of €71 million on account of principal and interest, on top of the issuance to the bondholders of 13.21% of its outstanding share capital.

In addition, Plaza is in negotiations regarding several disposal transactions with a total negotiated value of €140 million, with an estimated €71 million expected net proceeds to the company, the release said. Although there is no certainty that the transactions will be completed, Elbit said they are expected to close within a few months of Dec. 1.

Elbit said the enforcement of the accelerated repayment schedule would add significant pressure to Plaza’s liquidity and result in an acceleration of the asset sales, which is likely to have an adverse impact on the value achieved on any disposals.

As a result, the company said Plaza has a strong preference to continue operating on the basis of the extended repayment schedule, and it plans to seek from its bondholders a relaxation of the terms of the early prepayment required to maintain the extended repayment schedule.

The proposed amendments sought by Plaza call for the postponement of the early prepayment date by up to four months and the reduction of the total amount of the required early prepayments to at least NIS 382 million, a reduction of up to 12% from the original amount.

Apart from this requested amendment, Elbit said Plaza intends to fully comply with the notes repayment schedule.

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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