Plaza Centers to defer notes and claim payments under amended plan

By Caroline Salls

Pittsburgh, May 27 - Plaza Centers NV made available on its website a prospectus that has been published in Israel that includes an amended Dutch restructuring plan and details the proposed amendments to the terms of its Israeli series A and series B bonds, according to a news release.

According to the prospectus, the purpose of the restructuring plan is to allow the company to preserve value for its creditors by giving it time to resolve its liquidity situation and avoid a liquidation scenario.

Plaza Centers said this will primarily be achieved through a deferral of payment obligations. Apart from the proposed payment deferral, the plan does not require noteholders to take a loss on the value of their outstanding exposures.

Plan terms

Specifically, under the plan

• Principal payments on notes will be deferred for a period of one year to 4½ years, depending on the circumstances surrounding the specific notes;

• The company will use at least 75% of the net cash flow it receives from dispositions of real estate assets or new financings to make early prepayments on the notes and will be entitled to make further or other early prepayments at any time without incurring a penalty;

• As compensation for the deferral, the noteholders will receive an additional 1.5% annual interest payable on the notes, as well as company shares representing 13.21% of the outstanding share capital and the voting rights in the company;

• Guarantee claims will be deferred for a period of four years and will only be enforceable after the collateral granted as security for the underlying loan has been realized. The amount of the guarantee claim will be reduced to the extent that the collateral is sold at a price below 90% of the fair market value as determined by an appraiser. Guarantee claims are expected to be effectively be repaid in full with priority from the proceeds of the collateral provided for the underlying loans;

• Claims of all other ordinary unsecured creditors will be deferred for a period of four years;

• In order to further strengthen the position of the creditors, the company will raise €20 million in additional capital by means of a rights issue;

• The plan includes negative pledge, no new financial debt and coverage ratio covenants in favor of all creditors bound by the plan, as well as some limitations on distributions, including dividends. In addition, the plan includes financial covenants related to the realization of group real estate assets and the purchase and development of real estate assets; and

• The plan includes a mutual waiver from claims provision in favor of the company, its shareholders and their respective directors and officers, the noteholders and the Israeli trustees and other affiliated parties.

Implementation

Plaza Centers said it is confident that, upon implementation of the plan, the long-term viability of the company will be secured and it will be able to repay its creditors in full in accordance with the terms of the plan.

As previously reported, Plaza planned to file the amended restructuring plan with the Dutch Court on May 27.

Implementation of the restructuring proposal is subject to the amended restructuring plan being adopted by the requisite majority of creditors and subsequently confirmed by the Dutch Court.

Plaza Centers, a subsidiary of Tel Aviv-based Elbit Imaging Ltd., is a developer of shopping and entertainment centers in Central and Eastern Europe, India and the United States.

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