| Plaza Centers N.V. ( Plaza / Company / Group ) today announces its results for the year ended 31 December 2022.
Financial highlights:
Reduction in total assets by 1.5 million to 8.3 million mainly as a result of the decrease in equity accounted investees as detailed below, administrative expenses and costs of operations.
Consolidated cash position as of December 31, 2022 increased by circa 3.1 million to app. 7.8 million (December 31, 2021: 4.7 million) as result of received consideration after the sale of plot in Bangalore, India.
0.4 million gain recorded at an operating level (December 31, 2021: 2.9 million loss) mainly due to share in results of equity accounted investees and administrative expenses.
Recorded loss of 8.5 million (December 31, 2021: 27.1 million), mainly due to finance expenses on bonds.
Basic and diluted loss per share of 1.24 (31 December 2021: loss per share of 3.95).
Material events during the period:
Sale agreement of plot in Bangalore, India:
On September 2, 2022 the Company announced that on September 1, 2022 the transaction for the sale of EPI's whole rights in the Asset was completed for a total of INR 117 crores (approximately EUR 14.3 million) and that EPI received the full consideration as mentioned.
The total amount that the Company received from the transaction is about EUR 7.2 million and included the Company's share of the advances that the Purchaser has transferred in the months preceding the completion of the transaction.
Update regarding a change in Elbit Imaging Ltd holdings
On January 13, 2022, the Company announced that Elbit Imaging Ltd. ("Elbit Imaging") sold about 77 thousand shares of the Company, which are held in escrow account, for a total consideration of approximately NIS 150 thousand. Following, the last announcement date till November 2, 2022 Elbit Imaging sold about 34 thousand shares of the Company thus, Elbit Imaging holdings in the Company have diminished to 20.06% of the Company's issued and paid-up capital.
Deferral of payment of Debentures and partial interests payment:
Refer to the below in Liquidity & Financing.
Dutch statutory auditor:
Refer to Note 16 (b)(6) in the annual consolidated financial statements.
Annual General Meeting:
Annual general meeting of the Shareholders of the Company was held on July 20, 2022, all the proposed resolutions were passed.
Information regarding proposal from G.C. Hevron Capital Ltd:
In the period since July 9, 2021 till August 10, 2021, the Company received proposals from G.C. Hevron Capital Ltd ( Hevron Capital ). According to revised proposal received on August 10, 2021 the Company's assets will be transferred to a trustee and/or will be managed exclusively for the benefit of the bondholders, in order to create a mechanism according to which the bondholders will exclusively benefit from any expected income from the existing assets.
On August 11, 2021, the bondholders decided to approve that the Company's Board of Directors can conduct a negotiation with G.C. Hevron Capital Ltd regarding the sale of the Company's public structure and to grant a no shop for a period of 60 days during which due diligence will be carried out by G.C. Hevron Capital Ltd and its advisor.
On October 4th, 2021 the Company received a request from G.C Hevron Capital Ltd. to extend the "NO-SHOP" period, as Hevron Capital and its attorneys might not succeed to submit the agreement within the designated time schedules, due to the holiday s period and the complexity of the transaction.
The Company's Board of Directors has discussed Hevron Capital's request, as stated above, and decided to approve an extension of the "NO-SHOP" period by an additional 30 days, until November 12, 2021.
On March 30, 2022 the Company announced that Hevron Capital submitted to the Company a request to extend the No-Shop period, due to the complexity and the vast amount of data that needs to be procced in order to evaluate the proposed settlement ( Hevron Capital Request ). Following the above, the Company's Board of Directors approved Hevron Capital s Request to extend the "No-Shop" which expired as of May 20, 2022.
Update regarding an Engagement letter with a law firm in London in connection with the legal proceedings in the Casa Radio project:
On January 14, 2022 the Company announced, that further to the Company's bondholders meeting dated November 25, 2021 and the Company's bondholders' approval to initiate legal procedures in connection with the "Casa Radio" project (the "Project"); that on January 13, 2022, the Company signed an engagement letter with a law firm in London in order to take any relevant actions in connection with the Project. For details in connection with the legal proceedings in the Casa Radio project please refer to Note 5 in the annual consolidated financial statements.
Update regarding the issuance of a notice of dispute and acceptance of offer and consent to arbitrate to Romania with respect to the Casa Radio project:
On February 15, 2022 the Company announced, further to the Company's bondholders meeting dated November 25, 2021 and the Company's bondholders' approval to initiate legal procedures in connection with the "Casa Radio" project (the "Project"); that on January 13, 2022, the Company signed an engagement letter with a law firm in London in order to take any relevant actions in connection with the Project. For details in connection with the legal proceedings in the Casa Radio project please refer to Note 5 in the annual consolidated financial statements.
Taskforce on Climate-related Financial Disclosures ( TCFD ):
The Company notes the TCFD recommendations on climate-related financial disclosures.
(1) BACKGROUND
Released in 2017, the TCFD recommendations set out eleven recommended disclosures around four core areas for companies to report material climate-related information to the market via the mainstream financial report, as shown in Figure 1, below. In focusing on these four core areas of business practice and disclosure, the TCFD sought to ensure that consideration for climate-related matters were adequately embedded throughout the organization s governance, strategy, and risk management processes and transparently reflected for both preparers and users alike. In doing so, this addresses the demand for information that is consistent, comparable, reliable and clear. The TCFD recommendations also promoted the use of climate scenario analysis for the assessment of corporate strategic resilience. Climate scenario analysis is offered as a means to inform users about a company s strategic resilience, and enable companies to prepare and respond to the uncertainties of climate change and decarbonization efforts over different time horizons, both in terms of the timings of potential impacts as well as their magnitudes. By exploring a range of plausible and coherent climate futures and assessing the potential corporate risks and opportunities of each, companies can test their thinking and strategies, better understand the key drivers that will likely affect their business going forward, and adapt their strategies and ambitions accordingly. Whilst potentially challenging, scenario analysis is an essential component to TCFD reporting. It brings considerations of the short-, medium-, and long-term impacts of climate change into the present day, enabling companies and investors can act in a more informed and effective manner
The UK took the pioneer status and local firms will be required to disclose climate-related financial information, ensuring they consider the risks and opportunities they face as a result of climate change.
The UK is the first G20 country to make it mandatory for Britain s largest businesses to disclose their climate-related risks and opportunities, in line with TCFD recommendations
new legislation will require firms to disclose climate-related financial information, with rules set to come into force from April 2022
follows publication of UK s landmark Net Zero Strategy and forms part of the government s commitment to making the UK financial system the greenest in the world
The UK is becoming the first G20 country to enshrine in law mandatory TCFD-aligned requirements for Britain s largest companies and financial institutions to report on climate-related risks and opportunities.
From 6 April 2022, over 1,300 of the largest UK-registered companies and financial institutions will have to disclose climate-related financial information on a mandatory basis in line with recommendations from the Task Force on Climate-Related Financial Disclosures. This will include many of the UK s largest traded companies, banks and insurers, as well as private companies with over 500 employees and 500 million in turnover.
The TCFD is an industry-led group which helps investors understand their financial exposure to climate risk and works with companies to disclose this information in a clear and consistent way. It was launched at the Paris COP21 in 2015 by the Financial Stability Board (FSB) and Mark Carney, the UN Special Envoy on Climate Action and Finance and UK Finance Adviser for COP26, and has since published a clear and achievable set of recommendations on climate-related financial disclosures.
TCFD Recommendations
The TCFD Recommendations, first launched in 2017, are designed to encourage consistent and comparable reporting on climate-related risks and opportunities by companies to their stakeholders. The TCFD Recommendations are structured around four content pillars: (i) Governance; (ii) Strategy; (iii) Risk Management; and (iv) Metrics & Targets; and eleven recommendations to support effective disclosure under each pillar.
Why it is important to respond to the TCFD recommendations now?
The UK s Green Finance Strategy sets out the Government s expectations for all listed companies to disclose in line with the TCFD recommendations by 2022.
CDP has already amended its disclosures to include a section related to the risks and opportunities arising from climate change, which is based on the TCFD recommendations.
According to a 2019 TCFD status report, 340 investors with nearly $34 trillion in assets under management are asking companies to report under the recommendations.
(2) CORPORATE INFORMATION
For the details please refer to the Note 1 in the annual consolidated financial statements.
(3) GOVERNANCE
In relation to the above trend and legislation, the Company finds itself, as a premium traded firm, in the reporting category. However, the intention was to regulate the way the largest firms in the UK are reporting in relation to the climate change. The legislation clearly specifies companies with over 500 employees and 500 million in turnover .
The Company with its five employees, directors and the 1 land it holds, clearly falls far behind the regulator s criteria for reporting firms. The Company does not have its own offices, but sharing two offices in business hubs.
The Company is a very small company and cannot be compared with the above-mentioned giant scales. In fact, we are under the impression, the Company has by far an insignificant impact over the climate change, compared even with a micro company.
Just like the rest of the western world, the Company takes climate changes very seriously and is taking measures in order to increase its climate change orientation and to decrees negative effect on it in areas that are in the company s control.
Previously, the Company, was not very active on the topic of global warming, mainly due to is type and limited operations. Due to new reporting requirements and world trends, the Company is much more aware of the topic and is taking a proactive approach.
The Company is carefully looking into its own operation and constantly strives to reduce carbon footprint and improve the impact of its operations have on the environment, even though, that impact is negligible.
The Company has written an environmental sustainability policy that is being reviewed and adopted in Q4 of 2022. That policy creates a commitment of the Company to global climate change and will influence the company s operations in favor of minimalizing carbon footprint.
(4) STRATEGY
As the board of the Company is made aware of the climate change issues and the TFCD reporting, it starts to embed climate changing considerations into board daily decisions.
The first challenge was to study the issue and the board empowered the Chairman to study the issue and educate the Board.
The second challenge, was to create an environmental sustainability policy that will set the company in the right direction in terms of climate change countering.
Despite of the very limited current level of operations the company experiences, a provisional environmental policy was drafted and will be adopted by the Board on next Board meeting.
This policy will add the environmental consideration to every business decision the company takes in the future.
As the Company is in a runoff mode, climate related risks are potentially relevant in the short and maybe medium time frame.
In both terms, the company sees a small risk of higher level of maintenance attributed to the four plots it has, due to extreme weather events. These are included but not limited to: cleaning, evacuating and maintaining the plots.
The first impact of environmental study and climate change, was on the company s Board. After the adoption of the environmental policy by the Board, the Company will observe the management taking actions accordingly and having the environment in mind in daily operations, according to the new policy.
In light if the above mentioned, resilience, is very limited to absence, when taking into account the current operations of the Company.
(5) RISK MANAGEMENT
Risks analysis requires a sufficient amount of data in order to produce an accurate analysis.
In the Company case, there is only so much data that can be used for such a study. While the company does not build, develop or produce anything, the risks study is very limited.
Physical risks
As long as the Company is not developing its lands, there is no value chain that might be affected by storms, extreme weather or weather changes. Not even whether related disasters.
The Company does not see how changes such as floods, extreme waves or droughts can have a major impact on its office related work.
The consequences of the above phenomena are limited to an increase in either cooling or warming expenses.
One low factor risk is identified in an extreme weather condition, when any of a Company s plot is damaged due to such weather. That will lead to some expenses of cleaning, evacuating and restoring expenses.
A further related risk study is advised to the BOD to be performed in the current lands where the Company have the four plots. Any new risk identified locally, will be imbedded to the financial planning ahead.
Transition risks
Just like Physical risks, transitional risks are minimized when dealing with a five office n]based people, rather than a productive firm with mage processes and output.
Figure 1 non-exhaustive list of climate-related risks and opportunities:
Risk type Risk example Opportunity example
Technology Technology related risks are considered very limited in affecting the Company operations at the moment. The Company does not see any opportunity in technology in relations to current operations.
Policy Regulatory changes can only have an impact of the way the Company reports at the moment.
Local regulatory changes may affect to some effect, some of the plots the Company holds. Currently, the Company does not identify any opportunity in weather related policy change.
Market In current situation, where the Company operates as B to B, rather than B to C, it does not recognize a market relevant risk. The Company is not operating in B to C markets and therefore the market opportunity is irrelevant.
Legal and
reputational A climate-related incident affecting
an industry can and might affect a more comprehensive look into the plots the Company has. The Company does not recognize an opportunity in this section.
(6) METRIC AND TARGETS
Taking into account the limited scope of company s operations, it is clear that the metrics and targets are somewhat irrelevant for these operations. So is the disclosing of scopes 1-3 and the GHG emission. One needs sufficient operations in order to be able to produce, analyse and counter measures. The Company is by far not having significant operations in order to demonstrate the study and the cure. The Company s impact on climate change is negligible.
Key highlights since the period end:
Tax authority investigation
On March 27, 2023 the Company announced that the Tax Authority of the state of India initiated certain actions at the office of Elbit Plaza India Management Services Private Limited (which is a private company wholly owned by Elbit Plaza India Real Estate Holdings Limited) (hereinafter: "EPM") including a search and seizer of certain documents relating to EPM's activities/transactions in India in recent years. At this stage it is not yet clear what the purpose of the investigation is, including whether EPM is the purpose of the investigation or whether the investigation is related to any third party.
Commenting on the results, executive director Ron Hadassi said:
Our active focus has continued to centre on asset disposals, accordingly we have managed to execute the sale of our project in Bangalore, India following which the company received an amount of approximately EUR 7.2 million. In connection with Casa Radio Project, the Company has submitted with the International Centre for Settlement of Investment Disputes ( ICSID ) a Request for Arbitration (the Request ) against Romania for compensation of losses incurred due to failure of the Romanian authorities to cooperate, negotiate and adjust the PPP agreement.
For further details, please contact:
Plaza
Ron Hadassi, Executive Director 972-526-076-236
Notes to Editors
Plaza Centers N.V. (www.plazacenters.com) is listed on the Main Board of the London Stock Exchange, on the Warsaw Stock Exchange (LSE: PLAZ , WSE: PLZ/PLAZACNTR ) and, on the Tel Aviv Stock Exchange.
Forward-looking statements
This press release may contain forward-looking statements with respect to Plaza Centers N.V. future (financial) performance and position. Such statements are based on current expectations, estimates and projections of Plaza Centers N.V. and information currently available to the Company. Plaza Centers N.V. cautions readers that such statements involve certain risks and uncertainties that are difficult to predict and therefore it should be understood that many factors can cause actual performance and position to differ materially from these statements.
MANAGEMENT STATEMENT
During 2022 the management s focus has been on executing of the transaction for the sale of Bangalore project in India. The Company also continued cost reductions and partial repayments to its bondholders.
In connection with Casa Radio Project, as stated above, the Company submitted the Request and we hope this will help us to unblock the current status of the Project. In addition, on December 13, 2022 the Company and AFI Europe N.V. ( AFI Europe ) agreed to extend the Long Stop Date, which is the date on which the parties will execute a share purchase agreement, subject to the satisfaction of conditions precedent (the "SPA"), until December 31, 2023.
Due to the board and management estimation that the Company is unable to serve its entire debt according to the current redemption date (July 1, 2023) in its current liquidity position, the Company intends to request from the bondholders of both series (Series A and Series B) postponement of the repayment of the remaining balance of the bonds.
Results
During the year, Plaza recorded a 8.5 million loss attributable to the shareholders of the Company. This is a decrease compared to the losses reported in 2021 (loss of 27.1 million). The losses were mainly from the Net Finance Costs which were decreased to 8.9 million in 2022, from 24.2 million in 2021 mainly due to foreign currency losses on bonds (including inflation) and interests expenses accrued on the debentures (partly due to penalty interest calculated on the deferred principal); and from administrative expenses and share in results of equity-accounted investees.
Total result of operations excluding finance income and finance cost was a gain of 0.4 million in 2022 compared to the reported loss of 2.8 million in 2021.
The consolidated cash position (cash on standalone basis as well as fully owned subsidiaries) as of 31 December 2022 was 7.8 million (31 December 2021: 4.7 million).
Liquidity & Financing
Plaza ended the period with a consolidated cash position of circa 7.8 million, compared to 4.7 million at the end of 2021.
As of December 31, 2022, the Group s outstanding obligation to bondholders (including accrued interests) are app. 128.6 million.
As disclosed by the Company in Note 8 in the annual consolidated financial statements, the Company was not able to meet its final redemption obligation to its (Series A and Series B) bondholders, due on July 1, 2022. On June 16, 2022 the bondholders of Series A and Series B approved to postpone the final redemption date to January 1, 2023.
On November 8, 2022, the bondholders of Series A and Series B approved: (i) to postpone the final redemption date to July 1, 2023; (ii) that on January 1, 2023 the Company will pay to its bondholders a partial interest payment in the total amount of EUR 2,000,000 and to deferral all other unpaid interest. The amount reflected 6.08% of accrued interest as of that date.
Due to the board and management estimation that the Company is unable to serve its entire debt according to the current bonds repayment schedule in its current liquidity position, the Company intends to request the bondholders of both series for postponement of the repayment of the remaining balance of the bonds. However, there is an uncertainty if the bondholders will approve the request. In the case that the bondholders would declare their remaining claims to become immediately due and payable, the Company would not be in a position to settle those claims and would need to enter to an additional debt restructuring or might cease to be a going concern.
Strategy and Outlook
The Company s priorities are focused on efforts to unblock the current status of the Casa Radio project. The Company also intends to seek for bondholders approval for postponement of the repayment of the bonds.
OPERATIONAL REVIEW
Over the course of the year to date, Plaza has continued to make progress against its operational and strategic objectives. The Company s current assets are summarized in the table below (as of balance sheet date):
Asset/ Project Location Nature of asset Plaza s effective ownership
% Status
Casa Radio Bucharest, Romania Mixed-use retail, hotel and leisure plus office scheme 75 for further information refer to note 5 (2) in the annual consolidated financial statements )
FINANCIAL REVIEW
Results
Finance income of 2.8 million in 2022 was mainly due to foreign exchange movements on the debentures, which did not occur in the end of December 31, 2021.
Finance costs decreased from 24.2 million in 2021 to 11.7 million in 2022. The main components of finance costs were foreign currency losses on bonds (including inflation) and interests expenses accrued on the debentures which includes also penalty interest calculated on the deferred principal.
As a result, the loss for the period amounted to circa 8.5 million in 2022, representing a basic and diluted loss per share for the period of 1.24 (2021: 3.95 loss).
Balance sheet and cash flow
The balance sheet as of 31 December 2022 showed total assets of 8.3 million compared to total assets of 9.8 million at the end of 2021, mainly as a result of the decrease in Equity accounted investees and administrative expenses and costs of operations.
The consolidated cash position (cash on standalone basis as well as fully owned subsidiaries) as of 31 December 2022 increased to 7.8 million (31 December 2021: 4.7 million).
Investments in equity accounted investee companies has decreased by 5.05 million to circa 0.06 million (31 December 2021: 5.11 million) mainly as a result of cash distribution and a result on sale of Bangalore project.
As of 31 December 2022, Plaza has a balance sheet liability of app. 98.7 million from issuing bonds on the Tel Aviv Stock Exchange. Additionally, Plaza recorded provision for interests on bonds as of December 31, 2022, in amount of 29.9 million (31 December 2021: 21.7 million).
Disclosure in accordance with Regulation 10(B)14 of the Israeli Securities Regulations (periodic and immediate reports), 5730-1970
1. General Background
According to the abovementioned regulation, upon existence of warning signs as defined in the regulation, the Company is obliged to attach its report s projected cash flow for a period of two years, commencing with the date of approval of the report ("Projected Cash Flow").
The material uncertainty related to going concern was included in the independent auditors report and in Note 1(b) in the consolidated financial statements as of December 31, 2022. In light of the material uncertainty that the SPA between the Company and AFI Europe N.V. will eventually be executed and/or that the transaction will be consummated as presented above or at all (refer to Note 5 in the consolidated financial statements as of December 31, 2022), the board and management estimates that the Company is unable to serve its entire debt according to the due date the bond holders approved to postpone the final redemption date. Accordingly, it is expected that the Company will not be able to meet its entire contractual obligations in the following 12 months.
With such warning signs, the Company is providing projected cash flow for the period of 24 months following for the coming two years.
2. Projected cash flow
The Company has implemented the restructuring plan that was approved by the Dutch Court on July 9, 2014 (the Restructuring Plan ). Under the Restructuring Plan, principal payments under the bonds issued by the Company 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. During first three months 2017, the Company paid to its bondholders a total amount of NIS 191.7 million (EUR 49.2 million) as an early redemption. Upon such payments, the Company complied with the Early Prepayment Term (early redemption at the total sum of at least NIS 382 million) and thus obtained a deferral of one year for the remaining contractual obligations of the bonds.
In January 2018, a settlement agreement was signed by and among the Company and the two Israeli Series of Bonds.
On November 22, 2018 the Company announced based on its current forecasts, that the Company expected to pay the accrued interest on Series A and Series B Bonds on December 31, 2018, in accordance with the repayment schedule determined in the Company's Restructuring Plan and Settlement Agreement with Series A and Series B Bondholders from 11 January 2018 (the Settlement Agreement ). The Company noted that it will not meet its principal repayment due on December 31, 2018 as provided for in the Settlement Agreement. On February 18, 2019 the Company paid principal of circa EUR 250,000 and Penalty interest on arrears of EUR 150,000 following the bondholder s approval to defer principal repayment to July 1, 2019.
In addition, during June 2019 the bondholders approved the deferral of the full payment of principal due on July 1, 2019 and of 58% ("deferred interest amount") of the sum of interest (consisting of the total interest accrued for the outstanding balance of the principal, including interest for part of the principal payment which was deferred as of February 18, 2019, plus interest arrears for part of the principal which was fixed on February 18, 2019 and was not paid by the Company and all in accordance with the provisions of the trust deed; "the full amount of interest"), the effective date of which is June 19, 2019, and the payment date was fixed as of July 1, 2019. The company paid on the said date a total amount of circa EUR 1.17 million, which is only 42% of the full amount of interest.
On July 11, 2019, the Company announced that its Romanian subsidiary had signed a binding agreement to sell a land in Romania, and that the Company would use part of the proceeds now received by it EUR 0.75 million (hereinafter: "the amount payable"), in order to make a partial interest payment to the bondholders (Series A) and (Series B) issued by the Company. The payment required changes in the repayment schedule and amendments of the trust deeds which was approved unanimously by the Bondholders. The amount payable was paid on August 14, 2019 and reflects 30% of accrued interest as of that date.
On November 17, 2019, the bondholders of Series A and Series B approved a deferral of all the scheduled Principal payment and app. 87% of deferral of the scheduled Interest payment, both, as of December 31, 2019 to July 1, 2020.
On May 4, 2020, the bondholders of Series A and Series B approved: (i) to postpone the final redemption date to January 1, 2021 of all the scheduled Principal; (ii) that on July 1, 2020 the Company will pay to its bondholders a partial interest payment in the total amount of EUR 250,000 and to deferral all other unpaid scheduled Interest payment.
Following receiving the Settlement Amount related to the final price adjustment of the sale of Belgrade Plaza and in light of the potential negative impact of the Covid-19 on the possibility to receive future proceeds from the Company's plots in India, the Company decided to increase the amount to be paid to the bondholders on July 1, 2020, from EUR 250,000 to EUR 500,000. The amount reflected 6.74% of accrued interest as of that date.
On November 12, 2020, the bondholders of Series A and Series B approved: (i) to postpone the final redemption date to July 1, 2021 of all the scheduled Principal; that on January 1, 2021 the Company will pay to its bondholders a partial interest payment in the total amount of EUR 200,000 and to deferral all other unpaid scheduled Interest payment. The amount reflected 1.84% of accrued interest as of that date.
On April 12, 2021, the bondholders of Series A and Series B approved: (i) to postpone the final redemption date to January 1, 2022; (ii) that on July 1, 2021 the Company will pay to its bondholders a partial interest payment in the total amount of EUR 125,000 and to deferral all other unpaid interest. The amount reflected 0.84% of accrued interest as of that date.
On November 25, 2021, the bondholders of Series A and Series B approved: (i) to postpone the final redemption date to July 1, 2022; (ii) that on January 1, 2022 the Company will pay to its bondholders a partial interest payment in the total amount of EUR 200,000 and to deferral all other unpaid interest. The amount reflected 0.92% of accrued interest as of that date.
On June 16, 2022, the bondholders of Series A and Series B approved to postpone the final redemption date to January 1, 2023.
On November 8, 2022, the bondholders of Series A and Series B approved: (i) to postpone the final redemption date to July 1, 2023; (ii) that on January 1, 2023 the Company will pay to its bondholders a partial interest payment in the total amount of EUR 2,000,000 and to deferral all other unpaid interest. The amount reflected 6.08% of accrued interest as of that date.
The materialization, occurrence consummation and execution of the events and transactions and of the assumptions on which the projected cash flow is based, including with respect to the proceeds and timing thereof, although probable, are not certain and are subject to factors beyond the Company's control as well as to the consents and approvals of third parties and certain risks factors. Therefore, delays in the realization of the Company's assets and investments or realization at a lower price than expected by the Company, as well as any other deviation from the Company's Assumptions (such as additional expenses due to suspension of trading, delay in submitting the statutory reports etc.), could have an adverse effect on the Company's cash flow and the Company's ability to service its indebtedness in a timely manner.
In millions 2023 2024
Cash - Opening Balance (2) 7.77 4.62
Proceeds from sales transactions, price adjustments (6) - -
Proceeds from other income (7) 0.15 -
Total Sources 7.92 4.62
Debentures principal - -
Debentures - interest (3) 1.0 -
Other operational costs (4) 1.5
1.5
G&A expenses (including property maintenance) (5) 0.8 0.8
Total Uses 3.3 2.3
Cash - Closing Balance (2) 4.62 2.32
(1) The above cash flow is subject to the approval of the bondholders of both series to postponement of the repayment of the remaining balance of the bonds which are due on July 1, 2023.
(2) Total cash on standalone basis as well as fully owned subsidiaries.
(3) The amount includes the payment the Company forecasts to distribute in 2023, which is subject to the approval of the bondholders of both series.
(4) Includes provision for legal costs/Arbitrations.
(5) Total general and administrative expenses includes both cost of the Company and of all the subsidiaries.
(6) The Company did not include any proceeds from pre-sale agreement signed with AFI, due to the uncertainty as to the fulfilment of the conditions set out in the preliminary agreement as mentioned in Note 5(1)(e) of the consolidated financial statements as of 31.12.2022, thus there can be no certainty an SPA will eventually be executed and/or that the Transaction will be completed.
(7) Proceeds in amount of EUR 0.15 million from expected settlement agreement which is expected to be conducted with two Directors who are the defendants in the lawsuit described in Note 16(b)(5) of the consolidated financial statements.
Ron Hadassi
Executive Director
29 March 2023
PLAZA CENTERS N.V.
CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2022
IN 000 EUR
CONTENTS
Page
Independent Auditors' report 2 - 6
Consolidated statement of financial position 7
Consolidated statement of profit or loss 8
Consolidated statement of comprehensive income 9
Consolidated statement of changes in equity 10
Consolidated statement of cash flows 11
Notes to the consolidated financial statements 12 - 55
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Kost Forer Gabbay & Kasierer
144 Menachem Begin Road
Tel-Aviv 6492102, Israel
Tel: +972-3-6232525
Fax: +972-3-5622555
ey.com
Report on the Audit of the Consolidated Financial Statements
Independent Auditors' Report
To the shareholders of Plaza Centers N.V.
Opinion
We have audited the consolidated financial statements of Plaza Centers N.V. and its subsidiaries ("the Company"), which comprise the consolidated statement of financial position as at December 31, 2022 and the consolidated statements of profit or loss, comprehensive income, changes in equity and cash flows for the year then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as at December 31, 2022, and its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with International Financial Reporting Standards as adopted by the European Union.
Basis for Opinion
As mentioned in note 2(a) in the consolidated financial statements, these consolidated financial statements, with our report included, are not intended for Netherlands statutory filing purposes.
We conducted our audit in accordance with International Standards on Auditing. Our responsibilities under those standards are further described in the Auditors' Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Company in accordance with the International Ethics Standards Board for Accountants International Code of Ethics for Professional Accountants (including International Independence Standards) ("IESBA Code"), and we have fulfilled our other ethical responsibilities in accordance with the IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Material Uncertainty Related to Going Concern
We draw your attention to Note 1(b) in the consolidated financial statements which discloses the Company's financial position and board and management's future plans to meet its financial liabilities.
The board and management estimate that the Company is unable to serve its entire debt to bondholders according to the current repayment schedule in total amount of EURO 128.6 million as of December 31, 2022 which is due on July 1, 2023). The Company is dependent on the bondholders' approval for any postponement of payments. In addition, the Company is not in compliance with the main Covenants as defined in the restructuring plan (for more details refer also to Note 8), hence in default which could trigger early repayment by the bondholders.
The abovementioned conditions indicates the existence of a material uncertainty that casts significant doubt about the Company's ability to continue as a going concern. Our opinion is not modified in respect of this matter.
Kost Forer Gabbay & Kasierer
144 Menachem Begin Road
Tel-Aviv 6492102, Israel
Tel: +972-3-6232525
Fax: +972-3-5622555
ey.com
Emphasis of Matter
We draw your attention to Note 5(3)(c) which discloses the risk that the public authorities may seek to terminate the Public Private Partnership Agreement ("PPP Agreement") and/or relevant permits and/or could seek to impose delay penalties on the basis of perceived breaches of the Company's commitments under the PPP Agreement.
Our opinion is not modified in respect of this matter.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements for the year ended December 31, 2022. Except for the matter described in the Material Uncertainty Related to Going Concern section, we have determined that there are no other matters to communicate in our report.
Other information included in The Company s 2022 Annual Report
Other information consists of the information included in the Annual Report, other than the financial statements and our auditor s report thereon. Management is responsible for the other information.
Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of Management and the Board of Directors for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with International Financial Reporting Standards, as adopted by the European Union, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
The board of directors is responsible for overseeing the Company's financial reporting process.
Kost Forer Gabbay & Kasierer
144 Menachem Begin Road
Tel-Aviv 6492102, Israel
Tel: +972-3-6232525
Fax: +972-3-5622555
ey.com
Auditors' Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors' report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with International Standards on Auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.
As part of an audit in accordance with International Standards on Auditing, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors' report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors' report. However, future events or conditions may cause the Company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.
We communicate with the board of directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
Kost Forer Gabbay & Kasierer
144 Menachem Begin Road
Tel-Aviv 6492102, Israel
Tel: +972-3-6232525
Fax: +972-3-5622555
ey.com
We also provide the board of directors with a statement that we have complied with relevant ethical requirements regarding independence and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied.
From the matters communicated with the board of directors, we determine those matters that were of most significance in the audit of the consolidated financial statements for the year ended December 31, 2022 and are therefore the key audit matters. We describe these matters in our auditors' report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
The partner in charge of the audit resulting in this independent report is Mr. Itay Bar-Haim.
March 28, 2023 KOST FORER GABBAY & KASIERER
Tel Aviv, Israel A member of Ernst & Young Global
CONSOLIDATED STATEMENT OF FINANCIAL POSITION IN '000 EUR
December 31,
Note 2022 2021
ASSETS
Cash and cash equivalents 3 7,769 4,688
Restricted bank deposits 422 -
Prepayments and other receivables 48 39
Total current assets 8,239 4,727
Equity - accounted investees 6 63 5,113
Total non-current assets 63 5,113
Total assets 8,302 9,840
LIABILITIES AND SHAREHOLDERS' EQUITY
Bonds at amortized cost 8 98,738 99,999
Accrued interests on bonds 8 29,893 21,693
Trade payables 28 110
Other liabilities 7 431 425
Total current liabilities 129,090 122,227
Share capital 10 6,856 6,856
Translation reserve 10 (30,742) (30,838)
Other reserves (19,983) (19,983)
Share based payment reserve 10 35,376 35,376
Share premium 10 282,596 282,596
Accumulated deficit (394,891) (386,394)
Total equity (120,788) (112,387)
Total equity and liabilities 8,302 9,840
The notes are an integral part of the consolidated financial statements.
March 28, 2023
Ron Hadassi David Dekel
Date of approval of the
financial statements Executive Officer Chairman of the Board of Directors
CONSOLIDATED STATEMENT OF PROFIT OR LOSS IN '000 EUR
Year ended
December 31,
Note 2022 2021
Gains and other
Other income 4 181 386
Total gains 181 386
Total revenues and gains 181 386
Expenses and losses
Cost of operations (81) (77)
Share in results of equity-accounted investees 6 1,786 (1,903)
Administrative expenses 13 (1,454) (1,243)
Other expenses - (14)
Expenses and losses 251 (3,237)
Finance income 14 2,795 -
Finance costs 14 (11,724) (24,238)
Finance income (costs), expenses and losses (8,678) (27,475)
Loss before income tax (8,497) (27,089)
Loss for the year (8,497) (27,089)
Loss attributable to:
Equity holders of the Company (8,497) (27,089)
Earnings per share
Basic and diluted loss per share (EUR) 11 (1.24) (3.95)
The notes are an integral part of the consolidated financial statements.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME IN '000 EUR
Year ended
De | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | PLAZA CENTERS N.V. | | | | | (fullname of the issuer) | | | | | PLAZA CENTERS N.V. | | Budownictwo (bud) | | | | | (short name of the issuer) | | (sector according to clasification
of the WSE in Warsow) | | | | | 1012 AC | | Amsterdam | | | | | (post code) | | (city) | | | | | Pietersbergweg | | 283 | | | | | (street) | | (number) | | | | | | | | | | | | (phone number) | | | (fax) | | | | | | | | | | | | (e-mail) | | | (web site) | | | | | | | | | | | | (NIP) | | | (REGON) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
SIGNATURE OF PERSONS REPRESENTING THE COMPANY | | | Date | Name | Position / Function | Signature | | | 2023-03-29 | Ron Hadassi | Executive Director | | | | | | | | |
| Nazwa jednostki: | PLAZA CENTERS N.V. |
| Nazwa skrócona jednoskti: | PLAZA CENTERS N.V. |
| Adres: | Pietersbergweg 283, 1012 AC Amsterdam |
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