LONDON (Alliance News) - Plaza Centers NV Thursday said its rescue plan has been approved by the Dutch court as it tries to stem the flow of mounting losses and a worsening cash position.
Earlier this year, the developer of shopping and entertainment centres in Central and Eastern Europe posted pretax losses of EUR224.4 million for 2013, compared with losses of EUR90.7 million.
Plaza was beset by a number of problems throughout 2013 including a EUR186 million impairment of trading properties, equity accounted investees, investment property and pre-payments compared with just EUR83.7 million a year earlier. In addition, net finance costs more than doubled to EUR39.3 million from EUR17.2 million in 2012.
Plaza Centers was hit hard by the economic downturn, a corresponding lack of transactions in property investment markets and a lack of traditional bank financing. It has raised about EUR61 million by selling five assets in 2013, refinancing debt on some properties and has tried to maximise its returns from its remaining assets, it said.
However, this hasn't come quick enough to allow it to meet upcoming bond obligations, including a EUR15 million payment that was due to Polish bondholders in November and a EUR17 million payment due to Israeli bondholders in December.
The restructuring plan aims to secure the long-term viability and growth of the business and to enable the company to preserve value for its creditors by giving it time to resolve its liquidity situation.
The London and Warsaw-listed company said the approval of the plan defers the principal maturities of its Series A and Series B bonds for at least three and a half years and provides bonders with significantly improved terms, including additional interest of 1.5% a year, 13.21% of the shares in the company post its proposed rights issuance, certain covenants on operations, and an option for early repayments when any assets may be sold, said the company.
Plaza Centers shares were quoted down 4.1% at 11.50 pence Thursday morning.
By Anthony Tshibangu; anthonytshibangu@alliancenews.com; @AnthonyAllNews
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Plaza (PLAZ)