Plaza Centers’ main shareholder, Elbit Imaging, has approved several proposed changes to Plaza Centers’ 2014 restructuring plan.
As part of the proposed modifications, Plaza will make a one-time payment of 0.25% of the company’s outstanding debts on March 31, 2018. Additionally, the company agreed that in the event of a successful sale of the Casa Radio project in Bucharest, and if the net proceeds from the sale exceed 45 million euros, Plaza Centers will pay creditors up to 11 million euros, according to a company statement released to the London Stock Exchange on December 1.
The sale of the project considers the disposal of the stake in Casa Radio, but not the injection of funds from a third-party entity. Plaza Centers holds a 75% stake in the Bucharest project. The Romanian State holds 25%, and the remaining stake is held by other entities.
Plaza Centers invested 85 million euros in demolition, design, and foundation work until 2010, when the project entered conservation.
Casa Radio, a museum of communism
An old project of Ceausescu’s was set to take shape in the era of capitalism, following the signing of a public-private partnership in 2006. The land and the Casa Radio building on the Dambovita quay were leased by the Romanian state for a period of 49 years to Plaza Centers.
In place of the museum of communism, as Ceausescu imagined it, a mall, office towers, a hotel, and a conference center were to appear. Ten years after the partnership was signed, no building has taken shape.
Uncertainties regarding the Casa Radio project were raised by the company itself this spring, when it noted that “there may be regulatory risks regarding the Romanian Government’s right to expropriate the Casa Radio project or others regarding sanctions that may be imposed on Plaza Centers concerning the property.”
The company has also sought to attract other investors into the partnership.
After selling several plots of land across the country in recent years, where it had planned to build malls, the developer is in the stage of concluding contracts with the construction team for the erection of the mall in Timisoara. A first pre-lease agreement has been signed with Auchan.
Source: Economica
Frequently Asked Questions
Who owns the Casa Radio project?
The project is 75% owned by Plaza Centers and 25% by the Romanian State, with the remainder held by other entities.
What is the current status of the Casa Radio development?
The project has been in conservation since 2010, after Plaza Centers invested €85 million in demolition, design, and foundation works.
Why is Plaza Centers considering selling its stake?
The potential sale is part of a debt restructuring plan to facilitate payments to the company’s creditors.