Israel’s Elbit Imaging Ltd has sold a shopping center in Serbia while its chain of fashion stores in Israel has lost the license to use the “Mango” retail brand name.
The company operates in the fields of commercial and entertainment centers, medical industries and fashion apparel, distributing and marketing fashion apparel and accessories in Israel.
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Elbit announced that its subsidiary, Plaza Centers N.V., a public company listed on the London Stock Exchange and the Warsaw Stock Exchange in which the Company holds approximately 62.25% of the outstanding shares, has announced that it has successfully completed the disposal of its shopping and entertainment center, Kragujevac Plaza in Serbia for approximately €38.6 million ($48.7 million), in line with the asset’s last reported book value.
Following the repayment of related bank debt of approximately €28.2 million ($35.5 million), Plaza will receive net cash from the disposal of approximately €10.4 million ($13 million). 75% of the net cash proceeds will be distributed to Plaza’s bondholders in the fourth quarter of this year as an early repayment of the bonds, in line with Plaza’s stated restructuring plan. Restricted cash linked to the bank debt and other working capital balances of approximately €2 million ($2.5 million) were also released following the transaction.
The shopping center, which is 99% leased, opened in March 2012.
Elbit also announced today that its subsidiary Elbit Fashion Ltd. (“Elbit Fashion”) received from PUNTO FA, S.L (“Punto”) written notice of its intention not to extend the term of the franchise rights of Elbit Fashion for operation of the “Mango” retail stores in Israel, as granted under the agreement entered between Elbit Fashion and Punto on May 3, 2005 (the “Agreement”) and to terminate the Agreement such that the vast majority of Elbit Fashion’s “Mango” stores are scheduled to be closed on May 2015 while the remaining stores are scheduled to be closed during 2016 and 2017.
The Company and Elbit Fashion are currently reviewing and evaluating the aforementioned notice and the implications thereof and intend to vigorously protect and uphold their rights under the Agreement and any applicable law.
