Elbit Imaging Sells Interest in Four Hotels in the Netherlands to PPHE Hotel Group for Euro 169M
Elbit Imaging (NASDAQ: EMITF) announced Sunday that one of its wholly owned indirect subsidiary entered into a Share Purchase Agreement on March 30, 2012 with PPHE Hotel Group Limited, with regard to the sale of its holdings in its subsidiaries which own a 50% interest the following hotels in the Netherlands: the Park Plaza Victoria Amsterdam Hotel; the Park Plaza Utrecht Hotel; the art'otel Amsterdam and the Park Plaza Airport Hotel. The Hotels are jointly owned by Elbit and PPHE and are managed by PPHE. The transfer of title in the shares of the Purchased Companies to PPHE and the due date for the payment of the consideration, are scheduled to occur following the satisfaction of certain conditions, which are expected to be fulfilled by no later than May 30, 2012. The transfer of risk and benefit deriving from the Hotels and the Purchased Companies to PPHE, has been made as of March 30, 2012.
The transaction reflects an asset value of euro 169 million for all 4 Hotels. The total net consideration payable to Elbit is euro 26.5 million. In addition, approximately euro 58 million of Elbit's subsidiaries' share (50%) at banks loans was assumed by PPHE by virtue of the purchase of those subsidiaries and will be eliminated from Elbit's consolidated balance sheet. The consideration will be paid in the following manner: (i) euro 23 million in cash; (ii) PPHE shall issue and allot to Elbit 700,000 ordinary shares of PPHE, with a current market price of approximately euro 2 million, based on the quotation of such shares' price on the London Stock Exchange as of March 30, 2012; and (iii) an additional payment in the aggregate amount of up euro 1.5 million that shall be made on the fourth anniversary of the Transfer Date and shall be subject to certain adjustments, based on the PPHE shares' market price, as set forth in the agreement. The total gain which will be recognized in Elbit's financial statements as a result of the transaction is estimated at approximately NIS 180 million.
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