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Plaza Centers N.V. _"Plaza", the "Company" or the "Group"_ today announces its results
for the year ended 31 December 2025.
Financial highlights:
- Consolidated cash position as at 31 December 2025 decreased by approximately 0.75
million to 1.85 million _31 December 2024: 2.6 million_, primarily due to general
and legal expenses.
- Operating loss amounted to 0.6 million _31 December 2024: 3.4 million loss_, reflecting
lower general and legal expenses as well as additional income of 0.4 million, which
offset the expenses.
- Net loss of 18.0 million was recorded _31 December 2024: 28.1 million loss_, mainly
due to finance results on bonds, general and legal expenses.
- Basic and diluted loss per share amounted to 2.63 _31 December 2024: 4.10 loss per
share_.
Material events during the period:
Tax authority investigation:
On January 20, 2025 the Company announced that further to its announcement dated March
25, 2024 with regards to the search and seizure operations carried by the Indian tax
authorities at the offices of Elbit Plaza India Management Services Private Limited
_hereinafter: "EPIM"_ _which is a private company wholly owned by Elbit Plaza India
Real Estate Holdings Limited_, EPIM has received a tax assessment order _from the
Indian Tax Authority_ for the financial years 2022 - 2023 and with this the ongoing
income tax investigations/assessments are completed without imposing any liability
on EPIM.
Update regarding update regarding a lawsuit against entities involved in the sale
of U.S.A. shopping centers in 2011:
On May 22, 2025 the Company announced that, further to its announcement dated June
19, 2023 regarding the filing of a claim by Plaza and Elbit Imaging Ltd. _hereinafter:
"Elbit"_ _Plaza and Elbit shall be referred to hereinafter together as the: "Plaintiffs"_
against certain parties _a number of officers in Plaza and Elbit, some of the heirs
of the late Moti Zisser _former controlling shareholder of Plaza and Elbit_ and other
parties_ in relation to the Plaintiffs' transaction from 2011 for the sale of real
estate assets in the US in 2011; that a mediation agreement has been reached to end
the entire proceeding, according to which the Plaintiffs will be compensated in return
for a final and full waiver of claims. Plaza's share of the settlement amount is approximately
0.3 million. On June 29, 2025 the Company received the settlement amount.
Update regarding submission of a request for arbitration against Romania with respect
to the "Casa Radio" project:
On October 28, 2025 the Company announced that, the Ministry of Finance of Romania
filed its Statement of Claim in the London Court of International Arbitration _"LCIA"_,
requesting termination of the Public-Private Partnership _"PPP"_ Agreement and return
of project assets, with claimed losses increased to approximately EUR 2 billion _from
c. EUR 96 million previously claimed_. Plaza rejected the claims, attributing the
project's failure to Romania's actions, and confirmed it will continue its defense
and pursue counterclaims.
On November 19, 2025, the Company announced that, the Ministry of Finance of Romania
submitted a revised Statement of Claim, presenting certain alleged losses as alternative
rather than cumulative claims; at this stage, Plaza indicated it cannot reliably assess
the potential financial impact of the arbitration.
On March 29, 2024 the Company announced that, it has received a further engagement
letter _"Further Engagement Letter"_, from the Company's primary legal advisers in
connection with the arbitration for the "Casa Radio" project _the "Project"_. The
Further Engagement Letter is in line with Company's projected cash flow that was approved
at Bondholders' Meeting from October 11, 2023.
The LCIA arbitration remains connected to the International Centre for the Settlement
of Investment Disputes proceedings initiated by Plaza against Romania, for which a
final award is expecting in April, 2026.
In addition, on November 20, 2025, Plaza and AFI Europe N.V. agreed to extend the
long-stop date for the potential sale of Plaza's indirect 75% stake in the Casa Radio
project to December 31, 2026, with no certainty that the transaction will be completed.
Deferral of payment of Debentures and partial interests' payment:
Refer to the below in Liquidity _ Financing.
Dutch statutory auditor:
Refer to Note 15_b__6_ in the annual consolidated financial statements.
Key highlights since the period end:
Annual General Meeting:
Annual general meeting of the Shareholders of the Company was held on January 13,
2026, all the proposed resolutions were rejected.
Appointment of Company's auditor:
On January 15, 2026 the Company announced that further to its previous announcement
dated January 13, 2026 regarding results of Annual General Meeting, the Board of Directors
of the Company decided to reappoint KOST FORER GABBAY _ KASIERER _a member of the
global network of EY firms_ as the audit company authorised to audit the consolidated
financial statements of the Company for the year ended December 31, 2025 in order
to ensure the reporting requirements and enable the Company's proper operations.
Commenting on the results, executive director Ron Hadassi said:
"The Company continues to actively pursue all necessary actions in relation to the
Casa Radio Project. The Company has initiated arbitration proceedings against Romania
before the International Centre for Settlement of Investment Disputes _"ICSID"_ seeking
compensation for losses incurred as a result of the Romanian authorities' failure
to comply with their contractual obligations. The hearing on jurisdiction and merits
took place in November 2024, and the Company is currently awaiting the Tribunal's
ruling.
In parallel, the Company is defending its position in LCIA proceedings initiated by
Romania in relation to the Casa Radio Project and continues to reject all claims while
pursuing its counterclaims"
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 2025, the Company continued its cost reduction measures while maintaining its
ongoing engagement with bondholders.
In connection with the Casa Radio Project, as noted above, the Company has submitted
a Request for Arbitration with the International Centre for Settlement of Investment
Disputes, and expects that this process may assist in resolving the current impasse
affecting the Project.
In addition, on November 20, 2025, the Company and AFI Europe N.V. agreed to extend
the Long Stop Date, being the date by which the parties intend to execute a share
purchase agreement subject to the satisfaction of conditions precedent, until December
31, 2026.
Due to the board and management estimation the Company is unable to serve its entire
debt according to the current redemption date _July 1, 2026_ 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 loss of 18.0 million attributable to the shareholders
of the Company, compared to a loss of 28.1 million in 2024. The loss was mainly driven
by foreign exchange losses on bonds _including inflation effects_, interest expenses
accrued on the debentures _partly due to penalty interest on deferred principal_,
translation differences arising from the realization of foreign operations, as well
as administrative and legal expenses.
Total result of operations excluding finance income and finance cost was a loss of
0.6 million in 2025 compared to the reported loss of 3.4 million in 2024. The decrease
was caused mainly by lower general and legal expenses as well as additional income
of 0.4 million, which offset the expenses.
The consolidated cash position _including cash held by the Company on a standalone
basis and its wholly owned subsidiaries_ as of December 31, 2025 was 1.9 million _December
31, 2024: 2.6 million_.
Liquidity _ Financing
Plaza ended the period with a consolidated cash position of circa 1.85 million, compared
to 2.6 million at the end of 2024.
As of December 31, 2025, the Group's outstanding obligation to bondholders _including
accrued interests_ are app. 176.7 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, 2025. During June 2025 the bondholders of
Series A and Series B approved to postpone the final redemption date to January 1,
2026. During November 2025, the bondholders of Series A and Series B approved to postpone
the final redemption date to July 1, 2026.
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
The Company's current assets are summarised 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
In 2025, administrative expenses amounted to 0.9 million, compared to 3.3 million
in 2024. The decrease was mainly due to higher legal expenses incurred in 2024 in
connection with the arbitration proceedings initiated by the Company in Romania, as
described above in relation to the Casa Radio Project.
Net finance costs changed from 24.7 million loss in 2024 to 17.4 million loss in
2025. The main components of net finance costs were foreign currency gain on bonds
_including inflation_, 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 18 million in 2025, representing
a basic and diluted loss per share for the period of 2.62 _2024: 28.1 loss_.
Balance sheet and cash flow
Total assets as of December 31, 2025 amounted to 1.85 million _December 31, 2024:
2.6 million_, primarily comprising cash balances, and decreased due to general expenses
and legal costs.
As of 31 December 2025, Plaza has a balance sheet liability of app. 101.9 million
from issuing bonds on the Tel Aviv Stock Exchange. Additionally, Plaza recorded provision
for interests on bonds as of December 31, 2025, in amount of 74.8 million _31 December
2024: 55.1 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, 2025. 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, 2025_, 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.
During June 2023 the bondholders of Series A and Series B approved: _i_ to postpone
the final redemption date to January 1, 2024; ; _ii_ that on July 1, 2023 the Company
will pay to its bondholders a partial interest payment in the total amount of EUR
750,000 and to deferral all other unpaid interest.
During November 2023, the bondholders of Series A and Series B approved: _i_ to postpone
the final redemption date to July 1, 2024; _ii_ that on January 1, 2023 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.
During June 2024 the bondholders of Series A and Series B approved to postpone the
final redemption date to January 1, 2025. During November 2024, the bondholders of
Series A and Series B approved to postpone the final redemption date to July 1, 2025.
Accordingly, during June 2025 the bondholders of Series A and Series B approved to
postpone the final redemption date to January 1, 2026. During November 2025, the bondholders
of Series A and Series B approved to postpone the final redemption date to July 1,
2026.
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 2026 2027
Cash - Opening Balance _2_ 1.85 0.8
Proceeds from other income _3_ - -
Total Sources 1.85 0.8
Debentures - principal - -
Debentures - interest _4_ - -
Other operational costs _5_ 0.25
-
G_A expenses _including property maintenance_ _5_ 0.8 0.8
Total Uses 1.05 -
Cash - Closing Balance _2_ 0.8 -
_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, 2026.
_2_ Total cash on standalone basis as well as fully owned subsidiaries.
_3_ 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_ of the consolidated financial statements as of
December 31, 2025, thus there can be no certainty an the SPA will eventually be executed
and/or that the Transaction will be completed.
_4_ Payments of interests are subject to the approval of the bondholders of both series.
_5_ The cost includes a provision for arbitrations / legal costs based on projection
of arbitration process.
_6_ Total general and administrative expenses includes both cost of the Company and
of all the subsidiaries.
Ron Hadassi
Executive Director
31 March 2026
PLAZA CENTERS N.V.
CONSOLIDATED FINANCIAL STATEMENTSDECEMBER 31, 2025
IN 000 EURCONTENTS
Page
Independent Auditors' report 2 - 5
Consolidated statement of financial position 6
Consolidated statement of profit or loss 7
Consolidated statement of comprehensive income 8
Consolidated statement of changes in equity 9
Consolidated statement of cash flows 10
Notes to the consolidated financial statements 11 - 45
- - - - - - - - - - - - - - - - - - - - - -
Kost Forer Gabbay _ Kasierer
144 Menachem Begin Road
Tel-Aviv 6492102, Israel
Tel: +972-3-6232525
Fax: +972-3-5622555
ey.comReport 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, 2025 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 material accounting policy
information.
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, 2025, and its consolidated financial performance and its consolidated
cash flows for the year then ended in accordance with IFRS Accounting Standards as
adopted by the European Union.
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.
Basis for Opinion
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"_, as applicable to audits of financial
statements of public interest entities, 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
176.7 million as of December 31, 2025 which is due on July 1, 2026_. 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 7_, hence in default which could trigger
early repayment by the bondholders.
The abovementioned conditions indicate that a material uncertainty exists 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_1__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, 2025. 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 2025 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 IFRS Accounting 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.
- Plan and perform the group audit to obtain sufficient appropriate audit evidence
regarding the financial information of the entities or business units within the group
as a basis for forming an opinion on the consolidated financial statements. We are
responsible for the direction, supervision and review of the audit work performed
for the purposes 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, 2025 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 auditor's report is Mr.
Yeshayahu Silberstrom.
Tel-Aviv, Israel KOST FORER GABBAY _ KASIERER
March 31, 2026 A Member of Ernst _ Young GlobalCONSOLIDATED STATEMENT OF FINANCIAL
POSITION IN '000 EUR December 31,
Note 2025 2024
ASSETS
Cash and cash equivalents 3 1,847 2,588
Restricted bank deposits - 14
Prepayments and other receivables 39 28
Total current assets 1,886 2,630
Total assets 1,886 2,630
LIABILITIES AND SHAREHOLDERS' EQUITY
Bonds at amortized cost 7 101,890 104,040
Accrued interests on bonds 7 74,778 55,131
Trade payables 72 39
Other liabilities 6 271 548
Total current liabilities 177,011 159,758
Share capital 9 6,856 6,856
Other reserves _19,983_ _19,983_
Share based payment reserve 9 35,376 35,376
Share premium 9 282,596 282,596
Accumulated deficit _479,970_ _461,973_
Total equity _175,125_ _157,128_
Total equity and liabilities 1,886 2,630
The notes are an integral part of the consolidated financial statements.
March 31, 2026
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 2025 2024
Other income 4 445 58
Expenses and losses
Cost of operations _129_ _123_
Administrative expenses 12 _896_ _3,308_
Total Expenses and losses _1,025_ _3,431_
Finance income 13 92 121
Finance costs 13 _17,509_ _24,881_
Finance income _costs_, expenses and losses _18,442_ _28,191_
Loss before income tax _17,997_ _28,133_
Income tax
8 - -
Loss for the year _17,997_ _28,133_
Earnings per share
Basic and diluted loss per share _EUR_ 10 _2.63_ _4.10_The notes are an integral
part of the consolidated financial statements.CONSOLIDATED STATEMENT OF COMPREHENSIVE
INCOME
IN '000 EUR
Year ended
December 31,
2025 2024
Loss for the year _17,997_ _28,133_
Other comprehensive profit for the year, net of income tax - -
Total comprehensive loss for the year _17,997_ _28,133_
The notes are an integral part of the consolidated financial statements.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
IN '000 EUR
Share
capital Share Premium Share based payment reserves Capital reserve from acquisition
of non-controlling interests Accumulated deficit Total
Balance on January 1, 2024 6,856 282,596 35,376 _19,983_ _433,840_ _128,995_
Net loss for the year - - - - _28,133_ _28,133_
Total comprehensive loss for the year - - - - _28,133_ _28,133_
Balance on December 31, 2024 6,856 282,596 35,376 _19,983_ _461,973_ _157,128_
Net loss for the year - - - - - _17,997_ _17,997_
Total comprehensive loss for the year - - - - _17,997_ _17,997_
Balance on December 31, 2025 6,856 282,596 35,376 _19,983_ _479,970_ _175,125_The
notes are an integral part of the consolidated financial statements.
CONSOLIDATED STATEMENT OF CASH FLOWS IN '000 EUR Year ended
December 31,
2025 2024
Cash flows from operating activities
Loss for the year _17,997_ _28,133_
Adjustments necessary to reflect cash flows used in operating activities
Net finance costs 17,417 24,760
Cash flow from operations before changes in working capital _580_ _3,373_
Changes in:
Trade receivables _9_ _3_
Other receivables _2_ 68
Trade payables 33 _2_
Other liabilities, related parties' liabilities and provisions _277_ 76
Cash flow from changes in working capital _255_ 139
Interest paid - -
Interest received 38 121
Net cash used in operating activities _797_ _3,113_
Cash from investing activities
Investment in _receipt of_ restricted deposit 14 10
Net cash provided by investing activities 14 10
Net cash used in financing activities - -
Increase _decrease_ in cash and cash equivalents during the year _783_ _3,103_
Effect of movement in exchange rate fluctuations on cash held 42 _14_
Cash and cash equivalents at beginning of period 2,588 5,705
Cash and cash equivalents at end of period 1,847 2,588
The notes are an integral part of the consolidated financial statements.
NOTE 1: - CORPORATE INFORMATION
a. Plaza Centers N.V. _"the Company" and together with its subsidiaries, "the Group"_
was incorporated and is registered in the Netherlands. The Company's registered office
is at Tolstraat 112, 1074 VK, Amsterdam, the Netherlands. In past the Company conducted
its activities in the field of establishing, operating and selling of shopping and
entertainment centres, as well as other mixed-use projects _retail, office, residential_
in Central and Eastern Europe _starting 1996_ and India _from 2006_. Following debt
restructuring plan approved in 2014 the Group's main focus is to reduce corporate
debt by early repayments following sale of assets and to continue with efficiency
measures and cost reduction where possible.
The consolidated financial statements for each of the periods presented comprise the
Company and its subsidiaries _together referred to as the "Group"_.
The Company is listed on the premium segment of the Official List of the UK Listing
Authority and to trading on the main market of the London Stock Exchange _"LSE"_,
the Warsaw Stock Exchange _"WSE"_ and on the Tel Aviv Stock Exchange _"TASE"_.
b. Going concern and liquidity position of the Company:
As of December 31, 2025, the Company's outstanding obligations to bondholders _including
accrued interests_ are app. EUR 177 million with due date that was postponed to July
1, 2026 _the "Current Due date"_ _please refer to note 7_.
Due to the above the Company's primary need is for liquidity. The Company's current
and future resources include the following:
1. Cash and cash equivalents _including the cash of fully owned subsidiaries_ of approximately
EUR 1.847 million.
2. As detailed in note 5_1__e_, the Company and AFI Europe N.V. entered into an addendum
to the pre-sale agreement entered into between the Parties in connection with the
sale of its subsidiary _the "SPV"_ which holds 75% in the Casa Radio Project _the
"Project"_ _the "Addendum" and the "Agreement", respectively_ pursuant to which the
Parties 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, 2026. There can be no certainty that the
SPA will eventually be executed and/or that the transaction will be consummated as
presented above or at all.
3. In addition, as detailed in note 5_2_, 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 as described
in the note 5_1__c_ which include the Company's investment in the Project SPV, loss
of potential profit, and costs and expenses of the arbitration. At this stage there
is no certainty about the result of the dispute, hence no resources are expected to
be available in the foreseeable future.NOTE 1: - CORPORATE INFORMATION _Cont._
As of December 31, 2025, the Company is not in compliance with the main Covenants
as defined in the restructuring plan _for more details refer also to Note 7_, hence
constituting an event of default which could also trigger early repayment demand by
the bondholders.
Due to the abovementioned and due to the board and management estimation that the
Company is unable to repay its entire debt on the updated due date, the Company intends
to request the bondholders of both series an additional postponement of the repayment
of the remaining balance of the bonds. However, there is no certainty that 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.
Due to the abovementioned conditions, a material uncertainty exists that casts significant
doubt about the Company's ability to continue as a going concern.
NOTE 2:- MATERIAL ACCOUNTING POLICIES
a. Basis of preparation of these financial statements:
The following accounting policies have been applied consistently in the financial
statements for all periods presented, unless otherwise stated.
The consolidated financial statements have been prepared in accordance with IFRS Accounting
Standards _"IFRS"_, as adopted by the European Union _"EU"_.
The consolidated financial statements have been prepared on the historical cost basis.
These consolidated financial statements are not intended for statutory filing purposes.
The Company is required to file consolidated financial statements prepared in accordance
with
the Netherlands Civil Code.
At the date of approval of these financial statements the Company had not yet submitted
consolidated financial statements for the year ended December 31, 2019, December 31,
2020, December 31, 2021, December 31, 2022, December 31, 2023, December 31, 2024 and
December 31, 2025 in accordance with the Netherlands Civil Code _for more details
refer to Note 15_b__6__.
The consolidated financial statements were authorized to be issued by the Board of
Directors on March 31, 2026.
b. Functional and presentation currency:
These consolidated financial statements are presented in EURO _"EUR"_, which is the
Company's functional currency. All financial information presented in EUR has been
rounded to the nearest thousand, unless otherwise indicated.NOTE 2:- MATERIAL ACCOUNTING
POLICIES _Cont._
c. Functional and presentation currency
The EUR is the functional currency for Group companies since it is the currency of
the economic environment in which the Group operates. This is because the EUR is the
main currency in which management determines its pricing with potential buyers and
suppliers, determine its financing activities and budgets and assesses its currency
exposures.
d. Use of estimates and judgments:
The preparation of the consolidated financial statements in conformity with IFRS as
adopted by the EU requires management to make judgments, estimates and assumptions
that affect the application of accounting policies and the reported amounts of assets
and liabilities, income and expenses.
The estimates and associated assumptions are based on historical experience and various
other factors that are believed to be reasonable under the circumstances, the results
of which form the basis of making the judgments about carrying values of assets and
liabilities that are not readily apparent from other sources. Actual results may differ
from these estimates.
Information about assumptions and estimation uncertainties that have a significant
risk of resulting in a material adjustment within the next financial year are included
in the following notes:
- Notes 5 - key assumptions used in determining the net realisable value of trading
properties;
- Notes 5,15 - recognition and measurement of provisions and contingencies: key assumptions
about the likelihood and magnitude of an outflow of resources.
e. Basis of consolidation:
1. Subsidiaries:
Subsidiaries are entities controlled by the Group. The Group controls an entity when
it is exposed to, or has rights to, variable returns from its involvement with the
entity
and has the ability to affect those returns through its power over the entity. The
financial statements of subsidiaries are included in the consolidated financial statements
from the date on which control commences until the date on which control
ceases. Where necessary, adjustments are made to the financial statements of the subsidiaries
in order to bring the accounting policies used in line with the ones used by the Group
in the consolidated financial statements.
f. Foreign currency:
1. Foreign currency transactions:
Transactions in foreign currencies are translated to the respective functional currencies
of Group companies at exchange rates at the dates of the transactions.
NOTE 2:- MATERIAL ACCOUNTING POLICIES _Cont._
Monetary assets and liabilities denominated in foreign currencies are translated to
the functional currency at the exchange rate at the reporting date. Non-monetary assets
and liabilities that are measured at fair value in a foreign currency are translated
to the functional currency at the exchange rate when the fair value was determined.
Foreign currency differences are generally recognised in profit or loss. Non-monetary
items that are measured based on historical cost in a foreign currency are translated
at the exchange rate at the date of the transaction. Foreign currency differences
are generally recognised in profit or loss.
2. Foreign operations:
The assets and liabilities of foreign operations, including goodwill and fair value
adjustments arising on acquisition, are translated into euro at the exchange rates
at the reporting date. The income and expenses of foreign operations are translated
into euro at the exchange rates at the dates of the transactions. Foreign currency
differences are recognised in other comprehensive income, and accumulated in the translation
reserve, except to the extent that the translation difference is allocated to non-controlling
interest.
When a foreign operation is disposed of in its entirety or partially such that control,
significant influence or joint control is lost, the cumulative amount in the translation
reserve related to that foreign operation is reclassified to profit or loss as part
of the gain or loss on disposal.
If the Group disposes of part of its interest in a subsidiary but retains control,
then the relevant proportion of the cumulative amount is reattributed to non-controlling
interest.
When the Group disposes of only part of an associate or joint venture while retaining
significant influence or joint control, the relevant proportion of the cumulative
amount is reclassified to profit or loss.
If the settlement of a monetary item receivable from or payable to a foreign operation
is neither planned nor likely to occur in the foreseeable future, then foreign currency
differences arising from such item form part of the net investment in the foreign
operation. Accordingly, such differences are recognised in other comprehensive income
and accumulated in the translation reserve.
3. Index-linked monetary items:
Monetary assets and liabilities linked to the changes in the Israeli Consumer Price
Index _"Israeli CPI"_ are adjusted at the relevant index at each reporting date according
to the terms of the agreement.
NOTE 2:- MATERIAL ACCOUNTING POLICIES _Cont._
g. Cash equivalents:
Cash equivalents are considered as highly liquid investments, including unrestricted
short-term bank deposits with an original maturity of three months or less from the
date of investment or with a maturity of more than three months, but which are redeemable
on demand without penalty and which form part of the Group's cash management.
h. Financial instruments:
1. Financial liabilities:
a_ Financial liabilities measured at amortized cost:
Financial liabilities are initially recognized at fair value less transaction costs
that are directly attributable to the issue of the financial liability.
After initial recognition, the Company measures all financial liabilities at amortized
cost using the effective interest rate method.
2. De-recognition of financial liabilities:
A financial liability is derecognized only when it is extinguished, that is when the
obligation specified in the contract is discharged or cancelled or expires. A financial
liability is extinguished when the debtor discharges the liability by paying in cash,
other financial assets, goods or services; or is legally released from the liability.
i. Fair value measurement
A number of the Group's accounting policies and disclosures require the measurement
of fair value, for both financial and non-financial assets and liabilities.
When measuring the fair value of an asset or a liability, the Group uses market observable
data as far as possible. The Company's finance department reviews significant unobservable
inputs and valuation adjustments. If third party information, such as broker quotes,
is used to measure fair values, then the finance department assesses the evidence
obtained from the third parties to support the conclusion that such valuations meet
the requirements of IFRS, including the level in the fair value hierarchy in which
such valuations should be classified. Fair values are categorized into different
levels in a fair value hierarchy based on the inputs used in the valuation techniques
as follows:
- Level 1: quoted prices _unadjusted_ in active markets for identical assets or liabilities.
- Level 2: inputs other than quoted prices included in Level 1 that are observable
for the asset or liability, either directly _i.e. as prices_ or indirectly _i.e. derived
from prices_
- Level 3: inputs for the asset or liability that are not based on observable market
data _unobservable inputs_NOTE 2:- MATERIAL ACCOUNTING POLICIES _Cont._
Further information about the assumptions made in measuring fair values is included
in the following notes:
Note 15 - Financial instruments
j. Trading properties:
Trading properties are being designated for sale in the ordinary course of business
and as such are classified as trading properties _inventory_ and measured at the lower
of cost and
net realizable value.
Net realizable value is the estimated selling price in the ordinary course of business
less the estimated costs to complete construction and selling expenses. If net realizable
value is less than the cost, the trading property is written down to net realizable
value.
In each subsequent period, a new assessment is made of net realizable value. When
the circumstances that previously caused trading properties to be written down below
cost no longer exist or when there is clear evidence of an increase in net realizable
value because of changed economic circumstances, the amount of the write-down is reversed
so that the new carrying amount is the lower of the cost and the revised net realizable
value.
The amount of any write-down of trading properties to net realisable value and all
losses of trading properties are recognised as a write-down of trading properties
expense in the period the write-down or loss occurs. The amount of any reversal of
such write-down arising from an increase in net realizable value is recognized as
a reduction in the expense in the period in which the reversal occurs.
k. Finance income and cost:
Interest income and expense which are not capitalized are recognized in the income
statement as they accrue, using the effective interest method.
l. Initial application of new Amendments:
1. Amendments to IAS 21, "The Effects of Changes in Foreign Exchange Rates":
In August 2023, the IASB issued "Amendments to IAS 21: Lack of Exchangeability _Amendments
to IAS 21, "The Effects of Changes in Foreign Exchange Rates"_" _"the Amendments"_
to clarify how an entity should assess whether a currency is exchangeable and how
it should measure and determine a spot exchange rate when exchangeability is lacking.
The Amendments set out the requirements for determining the spot exchange rate when
a currency lacks exchangeability. The Amendments require disclosure of information
that will enable users of financial statements to understand how a currency not being
exchangeable affects or is expected to affect the entity's financial performance,
financial position and cash flows.
NOTE 2:- MATERIAL ACCOUNTING POLICIES _Cont._
The Amendments apply for annual reporting periods beginning on or after January 1,
2025. Earlier adoption is permitted, in which case, an entity is required to disclose
that fact. When applying the Amendments, an entity should not restate comparative
information. Instead, if the foreign currency is not exchangeable at the beginning
of the annual reporting period in which the Amendments are first applied _the initial
application date_, the entity should translate affected assets, liabilities and equity
as required by the Amendments and recognize the differences as of the initial application
date as an adjustment to the opening balance of retained earnings and/or to the foreign
currency translation reserve, as required by the Amendments .
The Company has assessed the impact of the Amendments and concluded that they do not
have a material impact on its consolidated financial statements.
m. Disclosure of new Standards not yet effective:
1. Amendments to IFRS 9, "Financial Instruments", and IFRS 7, "Financial Instruments:
Disclosures":
On May 30, 2024, the IASB issued "Amendments to the Classification and Measurement
of Financial Instruments - Amendments to IFRS 9 and IFRS 7" _"the Amendments"_. The
Amendments clarify certain aspects of the classification and measurement of financial
instruments.
The Amendments address the following:
- Derecognition of liabilities via electronic payment systems: Entities may elect
to derecognize financial liabilities settled electronically before the settlement
date if conditions are met and applied consistently.
- Assessment of contractual cash flows: Clarifies classification of financial assets
with ESG-linked and other contingent features. Updates definitions of 'non-recourse'
and contractually linked instruments _CLIs_.
- Disclosures: New IFRS 7 requirements for assets and liabilities with contingent
features _e.g., ESG-linked_ and for equity investments measured at FVTOCI.
Effective retrospectively for annual periods starting on or after January 1, 2026,
with early adoption allowed _partial early adoption permitted_. Restatement of prior
periods is optional if hindsight is not used.
The Company is evaluating the implications of the adoption of the Amendments on its
consolidated financial statements.
2. IFRS 18, "Presentation and Disclosure in Financial Statements":
In April 2024, the International Accounting Standards Board _"the IASB"_ issued IFRS
18, "Presentation and Disclosure in Financial Statements" _"IFRS 18"_ which replaces
IAS 1, "Presentation of Financial Statements".
NOTE 2:- MATERIAL ACCOUNTING POLICIES _Cont._
IFRS 18 is aimed at improving comparability and transparency of communication in financial
statements. IFRS 18 builds on IAS 1, introducing new presentation requirements for
the statement of profit or loss, including specified subtotals and disclosure of management-defined
performance measures. It also sets rules for aggregating and disaggregating financial
information.
While recognition and measurement rules remain unchanged, profit or loss items must
now be classified into five categories _operating, investing, financing, income taxes,
and discontinued operations_, which may affect reported operating profit. IFRS 18
also led to related updates to IAS 7 and IAS 34.
IFRS 18 is effective for annual reporting periods beginning on or after January 1,
2027, and is to be applied retrospectively. Early adoption is permitted subject to
disclosure.
The Company is evaluating the effects of IFRS 18, including the effects of the consequential
amendments to other accounting standards, on its consolidated financial statements.NOTE
3:- CASH AND CASH EQUIVALENTS
December 31,
Bank deposits and cash denominated in 2025 2024
EUR - bank balances _1_ 499 2,365
New Israeli Shekel _NIS_ - bank balances _2_ 1,211 136
Other currencies 137 87
1,847 2,588
_1_ As of December 31, 2025, including deposit of EUR 0,36 million - 1,3-1,7% interests
rate _as of December 31, 2024 - EUR 1,8 million - 2,35% interests rate_.
_2_ As of December 31, 2025, including deposit of EUR 1,2 million - 3,7-4,4% interests
rate. NOTE 4:- OTHER INCOME
December 31,
2025 2024
Other income _1_ 445 58
445 58
_1_ For 2025 - refer to Note 15_b__5_.
NOTE 5:- TRADING PROPERTIES
_1_ Casa Radio:
_a_ General:
In 2006 the Company entered into a PPP agreement with the Government of Romania to
develop the Casa Radio site in the city center of Bucharest _"Project"_ and acquired
75% interest in the joint venture company developing the Project _"Project SPV"_.
After signing the PPP agreement, the Company holds indirectly 75% of the shares in
the Project SPV, the remaining shares are held by the Romanian authorities _through
CNI, a Romanian company ultimately owned by the Romania authorities__15%_ and a third-party
private investor _10%_.
Pursuant to the PPP agreement, the Project SPV was granted development and exploitation
rights in relation to the site for a period of 49 years, starting December 2006 _34
years remaining at the end of the reporting period_. As part of its obligations under
the PPP agreement, the Project SPV has committed to construct a public authority building
_"PAB"_ measuring approximately 11.000 square meters for the Romanian Government at
its own cost.
Large scale demolition, design and foundation works were financed by loans given to
the Project SPV by the Company. These works were performed on site until 2010. Construction
and development were put on hold due to difficulties procuring further financing because
of the global financial crisis and later, as well as, the lack of progress in the
renegotiation of the PPP agreement with the Romanian authorities, as detailed in subsection
_c_ below. These circumstances _and mainly the bureaucratic deadlock with the Romanian
authorities to deal with the issues specified below_ caused the Project SPV not to
meet the development timeline of the Project as specified in the PPP agreement. However,
management believes that it had legitimate reasons for the delays in this timeline,
as discussed in subsection _c_ below.
_b_ Obtaining of the Detailed Urban Plan _"PUD"_ permit:
The Project SPV obtained the PUD for the Project in September 2012. On December 13,
2012, the Court took note of the waiver of the claim submitted by certain plaintiffs
and rejected the litigation aiming to cancel the approval of the Zonal Urban Plan
_"PUZ"_ for the Project. The Court decision is irrevocable.
_c_ Discussions with the Romanian authorities:
Following the Court decision with respect to the PUZ, the Project SPV was required
to submit a request for building permits within 60 days from the approval date of
the PUZ/PUD and commence development of the Project within 60 days after obtaining
the building permits. The building permits have not been obtained.
NOTE 5:- TRADING PROPERTIES _Cont._
Due to substantial differences between the approved PUD and stipulations in the PPP
agreement and changes in EU law concerning environmental considerations in buildings
used by public bodies, the Project SPV attempted to renegotiate the future development
of the Project with the Romanian authorities on items such as timetable, structure,
milestones and adaptation of the PAB development to the current EU requirements. Despite
many notifications sent to the Romanian authorities, expressing a wish to renegotiate
the existing PPP agreement, no major breakthrough has been achieved. The Company may
be subject to significant delay penalties under the terms of the PPP agreement if
it is determined that the Company was at fault in causing the delays.
Because of the failure of the Romanian authorities to cooperate, negotiate and adjust
the PPP agreement, the Project SPV was not able to meet its obligations under the
PPP agreement. This resulted in a situation where the Project SPV could not "de facto"
continue the execution of the Project and created a risk that the Romanian authorities
could attempt to terminate the PPP agreement and/or to impose penalties on the Company
and the Project SPV. As of the date of approval of these consolidated financial statements,
the Project SPV has not received any termination notification from the Romanian authorities.
Still, in the case of termination of the PPP agreement, any disputes regarding the
relationship and compensation between the parties is to be determined by way of arbitration.
Management, believes that, in the case of termination, the Company has a good case
to claim compensation for damages.
The Romanian authorities undertook to discuss in good faith the restructuring of the
Project and the PPP agreement in situations where significant unexpected circumstances
arise. Further, the unresponsiveness of the Romanian authorities is a violation of
the general undertaking to support the Project SPV in the execution of the Project
as agreed in the PPP agreement.
Management has taken a number of steps in order to unblock the development of the
project and mitigate the risk of termination of the PPP agreement, including commencing
a process to identify third party investors willing and capable to join in the development
of the Project and/or potential buyers of the Company's interest in the Project. Management
believes that reputable investors with considerable financial strength can enhance
negotiation position vis--vis the Romanian authorities and assist in advancing an
amicable agreement with the relevant authorities with respect to the development of
the Project. As a result of the Company's ongoing efforts, a pre-sale agreement for
the sale of its shareholding in the Project SPV and its interests in the Project was
signed on 3 July 2019 _see subsection _e_ below_.
NOTE 5:- TRADING PROPERTIES _Cont._
_d_ Provision in respect of PAB:
As mentioned in point _a_ above, when the Company entered into an agreement to acquire
75% interest in the Project SPV it assumed a commitment to construct the PAB at its
own costs for the benefit of the Romanian Government. As detailed in note 5_2_ below,
the carrying amount of the trading property was fully written off as of December 31,
2020. Accordingly, the Company also fully reduced the provision in respect of the
construction of the PAB as of December 31, 2020.
_e_ On 3 July 2019 the Company's wholly owned subsidiary Dambovita Center Holding
B.V _"Dambovita NL"_ as seller, the Company as guarantor and AFI Europe N.V. as buyer
entered into a pre-sale agreement for the sale of the shareholding in Dambovita Center
S.R.L _"Dambovita RO"_ _the "Pre-Sale Agreement"_. Pursuant to the terms of the Pre-Sale
Agreement, AFI Europe N.V. shall carry out a due diligence review which shall be completed
no later than 5 September 2019 following which, subject to the satisfaction of the
other Conditions precedent in the Pre-Sale Agreement, the parties to the Pre-Sale
Agreement will execute a share purchase agreement in the short form being Annex 3
to the Pre-Sale Agreement _the "SPA"_ and an intragroup loan assignment/novation agreement.
Conditions precedent in the Pre-Sale Agreement comprise inter alia _i_ the satisfactory
completion of a due diligence investigation by AFI Europe N.V. by the latest on 5
September 2019; _ii_ the Romanian competition council having issued competition approval
for the transaction; _iii_ publication of the contemplated sale of the shares in Dambovita
RO by Dambovita NL in the Official Gazette of the Romanian Government and the lapse
of a 30-day objection period with no opposition being lodged; _iv_ no pending or imminent
material adverse change _which includes insolvency of Dambovita RO, termination of
the PPP Agreement or a significant amendment of the terms and conditions of the PPP
Agreement rendering the fulfilment thereof more onerous; _v_ issuance of a Government
Decision confirming
that Dambovita NL may transfer the shares to AFI Europe N.V._or any of its affiliates_
and that the Company and Elbit Imaging Ltd. may transfer their rights and obligations
under the PPP Agreement to AFI Europe N.V._vi_; amendment of the PPP Agreement in
order to transfer the rights of Elbit Imaging Limited and the Company to AFI Europe
N.V.; _vii_ obtaining a written confirmation that the 49 years term of the PPP Agreement
shall be calculated, the earliest, starting from 2012,
however, in case the 49 years concession term is calculated from any other previous
date, the parties to the Pre-Sale Agreement will try to find an amicable compromise,
discounting the Purchase Price _as defined below_ to reflect the shorter concession
term; in case of such parties' failure to reach an agreement with respect to the discounted
Purchase Price, AFI Europe N.V. has the right to consider this condition precedent
as not being fulfilled; and _viii_ the receipt of approval of the General Meeting
and the Company's bondholders for the Transaction.
NOTE 5:- TRADING PROPERTIES _Cont._
Upon satisfactory completion of the due diligence to be carried out by AFI Europe,
there will be a down payment of EUR 200,000, which shall be repaid upon the occurrence
of _i_ cancellation of the PPP Agreement; _ii_ initiation of Dambovita RO's dissolution
due to negative equity requirements; _iii_ the existence of elements of criminal investigation
against Dambovita RO, beyond the information as disclosed to AFI Europe or, if such
investigation would be held against Dambovita RO's directors of employees, in case
this would trigger a significant impact on the Dambovita Project or _iv_ Dambovita
NL refuses to proceed to closing or is not present at the closing date, although all
the conditions precedent were fulfilled or waived. The fulfilment of the Conditions
precedent relating to the approval of the Company's shareholders and bondholders as
referred to above must occur no later than 5 September 2019. On 30 July 2019, the
bondholders of Bonds series A and Bonds Series B decided to authorize the Company
to enter into the agreement and execute the transaction contained therein. In addition,
an extraordinary general meeting of Shareholders of the Company held on 29 August
2019 approved the transaction as detailed in the Notice of EGM.
On 5 September 2019 in accordance with the pre-sale agreement, AFI has paid the down
payment of EUR 200,000.
PRE-SALE AGREEMENT - SPECIFIC PROVISIONS
The long stop date as referred to in the Pre-Sale Agreement _i.e. the date on which
all conditions precedent must be fulfilled and closing of the Transaction must occur_
is 15 months after the lapse of the due diligence period _5 September 2019_.
Pursuant to the Pre-Sale Agreement, Dambovita NL will transfer its interest in Dambovita
RO and will assign the Intragroup Loans to AFI Europe N.V. for the maximum consideration
of EUR 60 million, subject to the fulfilment of certain conditions _the "Purchase
Price"_.
The Purchase Price is defined in the Pre-Sale Agreement as EUR 60 million minus 75%
of Dambovita RO's liabilities computed based on the closing accounts _being the financial
statements of Dambovita RO for the period from 1 January of the year in which the
closing of the Transaction will occur_ and excluding the Intragroup Loan, plus 75%
of Dambovita RO's available cash and other current assets as shown in the closing
accounts _as referred to above_ and minus _insofar applicable_ an amount agreed upon
by the parties to the Pre-Sale Agreement to be reduced from the Purchase Price if
the 49-year PPP-rights period will be calculated from any date prior to the year 2012.
The loan assignment amount _as part of the Purchase Price_ will be
calculated on the Closing Date as the balance between the Purchase Price and the price
for the shares sold _being the nominal value of these shares RON 44,050,380, which
is the equivalent of USD 14,778,862_.
NOTE 5:- TRADING PROPERTIES _Cont._
Subject to fulfilment of the conditions precedent in the Pre-Sale Agreement as detailed
above which includes, among others, the execution of the SPA, AFI Europe N.V. is bound
to make a payment of EUR 20 million to Dambovita NL. A further EUR 22 million is to
be paid later upon the issuance by the competent authorities of a building permit
for the first stage of the Dambovita Project _the development of the shopping mall
or the office building, excluding the public authority building as referred to above_.
The balance between the Purchase Price and the payments already made, will be paid
out to Dambovita NL upon all permits required for the operation of any of the components
_office building or shopping mall_ of the first stage of the Dambovita Project including
a fire permit and the operation permit having been obtained. In addition the Company
and Dambovita NL, granted the AFI Europe N.V. indemnification, jointly and severally,
for some warranties under the Pre-Sale Agreement, which customary in such transactions.
On November 2, 2020, the Company, Dambovita NL and AFI Europe N.V. _"AFI", and together
with the Company, the "Parties"_ entered into an addendum to the pre-sale pursuant
to which the Parties 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, until December 31, 2021.
The Parties have further agreed that in case of any litigation and/or arbitration
process to which the Company is a party, will result in the loss of any of their rights
under the PPP Agreement with the Government of Romania to develop the Casa Radio site
in the city center of Bucharest, AFI shall no longer be bound by its obligations under
the Agreement and the Company shall reimburse AFI with the entire advance payment
of EUR 200,000 already paid by AFI. The prepayment of EUR 200,000 is included in
Other Liabilities in the consolidated statement of financial position. The Addendum
was subject to the approval of the Company's bondholders which was obtained on November
12, 2020.
The Company, Dambovita NL and AFI signed a series of addenda to the Agreement extending
the Long Stop Date as follows:
- Addendum 2 _December 20, 2021_ - extended to December 31, 2022
- Addendum 3 _December 13, 2022_ - extended to December 31, 2023
- Addendum 4 _December 04, 2023_ - extended to December 31, 2024
- Addendum 5 _December 05, 2024_ - extended to December 31, 2025
- Addendum 6 _November 20, 2025_ - extended to December 31, 2026
As of the date hereof, there can be no certainty that either the conditions precedent
in the Pre-Sale Agreement as detailed above will be met, that the Sale Agreement will
be executed and/or that the Transaction will be consummated as presented above or
at all. NOTE 5:- TRADING PROPERTIES _Cont._
_2_ Write-down of trading properties:
Trading properties are measured at the lower of cost and net realizable value.
Determining net realizable value is inherently subjective as it requires estimates
of future events and takes into account special assumptions in the valuations, many
of which are difficult to predict.
Actual results could be significantly different than the Company's estimates and could
have a material effect on the Company's financial results.
These valuations become increasingly difficult as they relate to estimates and assumptions
for projects in the preliminary stage of development.
Management is responsible for determining the net realizable value of the Group's
trading properties.
As detailed above, despite many notifications sent to the Romanian authorities expressing
a wish to renegotiate the existing PPP agreement, no major breakthrough could be achieved,
in addition, the Romanian authorities have not cooperated substantively with the Company's
request to approve the transfer of the Company's shares in the Project SPV and its
interest in the Project to AFI.
Because of the abovementioned issues surrounding the satisfaction of the conditions
precedent in the pre-sale agreement, it is currently not certain whether the sale
agreement as contemplated in the pre-sale agreement would be entered into and whether
therefore the transaction with AFI would proceed. As such the Company, Dambovita NL
and AFI Europe N.V. agreed to extend the Long Stop Date until December 31, 2026. Additionally,
as the external appraisers, in their opinion from the previous years did not reflect
the risk related to the uncertainty in respect of fulfilment of the conditions precedent
set out in the pre-sale agreement, as described above, management has concluded that
it can't measure the net realizable value of the Project based on either the pre-sale
agreement or based on the residual value approach as management would need to assume
that it would receive the
Romanian authorities approval to restructure and adjust the PPP agreement. As a result,
the value of the trading property of the Project was fully reduced.
Still, the Company believes that despite this reduction there is no change in the
value of the Company's rights under the PPP Agreement. In addition, management, believes
that the Company has a good case to claim compensation for economic damages. On the
other hand, if the Company comes to an understanding with the Romanian authorities,
it will measure the Casa Radio NRV to reflect its updated financial projections.
The Company is actively pursuing all available options, including legal avenues, to
achieve progress. On May 16, 2022, it submitted a Request for Arbitration with the
International Centre for Settlement of Investment Disputes _"ICSID"_ against Romania,
seeking full compensation for losses incurred due to Romania's failure to cooperate,
negotiate, and adjust the PPP agreement _as outlined in Note 5_1__c__. These claims
include the Company's investment in the Project SPV, loss of potential profit, and
arbitration costs.
NOTE 5:- TRADING PROPERTIES _Cont._
The Request was registered on June 3, 2022, and the Tribunal was constituted on November
1, 2022. The Company filed its Memorial and supporting evidence on April 6, 2023,
and successfully opposed Romania's Request for Bifurcation on May 18, 2023, ensuring
the Arbitration proceeds as a single phase.
The hearing was held in the fourth quarter of 2024, and the Tribunal's award is expected
in April of 2026.
On July 12, 2023, Plaza and Dambovita Center SRL _a subsidiary of Plaza and the Project
Company in charge of the Casa Radio Project_ received a notice of default from the
Ministry of Finance under the public-private partnership contract governing the Casa
Radio Project.
On July 15, 2024, Plaza received a notice from the Romanian Ministry of Finance initiating
arbitration under London Court of International Arbitration _"LCIA"_ rules against
the Company, Elbit Imaging Ltd, and a third-party private investor _collectively,
the "Respondents"_.
On October 24, 2025, the Romanian Ministry of Finance filed its Statement of Claim,
formally requesting termination of the 2006 Public Private Partnership _PPP_ Agreement,
seeking the return of all project assets to the Romanian State and claiming compensation
for alleged losses and penalties.
The Company denies all claims formulated by the Ministry of Finance in the ongoing
LCIA arbitration with Romania.
NOTE 6:- OTHER LIABILITIES
December 31,
2025 2024
Prepayments _1_ 200 200
Salaries and related expenses 2 12
Accrued expenses 69 336
Total 271 548
_1_ Comprises EUR 200 thousand payable due to down payment in regard to pre-sale agreement
for the sale of Casa Radio Project _refer to note 5_1__e__. NOTE 7:- BONDS
a. Composition:
Effective interest rate Contractual interest rate Principal final maturity Carrying
amounts
as at
December 31 2025
Series A Bonds 11.58% CPI+8%_*_ July 2026 42,302
Series B Bonds 13.83% CPI+8.9%_*_ July 2026 59,588
101,890
_*_ Including 2% interest on arrears
b. Mandatory repayments subsequent to the reporting date _without early repayments_:
2026 101,890
101,890
_1_ Pursuant to the Company's Restructuring Plan, the Company will assign 78% of the
net proceeds received from the sale or refinancing of any of its assets as early repayment.
_2_ Approved amendment to an early prepayment term under the Restructuring Plan
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 the first three months of 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 382,000,000 _approximately EUR 98 million__ and thus obtained
a deferral of one year for the remaining contractual obligations of the bonds.
NOTE 7:- BONDS _Cont._
In addition to the above, the following terms were approved by the bondholders:
_a_ Casa Radio proceeds - If the Company shall sell the Casa Radio project located
in Romania _hereinafter: the "Project"_ to a third party, including by way of selling
its holdings in any of the entities through which the Company holds the project _and
said sale shall be carried out before the full repayment of the bonds and until no
later than December 31, 2019, and for an amount which exceeds EUR 45 million net _i.e.
after brokerage fees _if any_, taxes, fees, levies or any other obligatory payment
due to any authority in respect to the said sale_ which shall actually be received
by the Company, then the holders of bonds shall be eligible for a one-time payment
_which shall come in addition to the principal and interest payments in accordance
with the repayment schedule_, in certain amounts specified in tranches.
_b_ Registering of Polish bonds for trade - the Company has committed to undertake
best efforts to admit the Polish bonds for trading on the Warsaw Stock Exchanges and
proceeding in this respect are ongoing.
_c_ Deferred debt ratio of Series B bonds - were reduced to 68.24% from 70.44%
following the cancellation of the treasury bonds. The ratio has been changed for
Series B bonds in order to maintain a distribution ratio between the three series.
c. Settlement agreement with Bondholders of Israeli Series of Bonds:
In January 2018, a settlement agreement was signed by and among the Company and the
two Israeli Series of Bonds _"Settlement Agreement"_. In the Settlement Agreement
it was agreed, inter alia, to approve:
- New repayment ratios between the two Israeli Series of Bonds _new ratio: Bond A-
39% Bond B- 61%_;
- An increase in the level of the mandatory early repayments from 75% to 78% of the
relevant net income;
- New repayment schedule;
- An increase in the compensation to be paid to the Bondholders in the event of successful
disposal of Casa Radio Project;
- A waiver of claims to the Company and its directors and officers; and
- To waive the request for publication of quarterly financial reports by the Company.
As a result of settlement agreement signing, Series A Bondholders withdraw their request
for immediate repayment.
It is clarified that the Settlement Agreement is a separate agreement among the parties
thereto with respect to the Company's restructuring plan, and as such has no effect
on the Polish Bondholders.
NOTE 7:- BONDS _Cont._
On January 31, 2018 the Company paid the bondholders a total amount of principal and
interest of EUR 38,487 thousand.
_1_ The net cash flow received by the Company following an exit or raising new financial
indebtedness _except if taken for the purpose of purchase, investment or development
of real estate asset_ or refinancing of real estate assets after the full repayment
of the asset's related debt that was realized or in respect of
a loan paid in case of debt recycling _and in case where the exit occurred in the
subsidiary - amounts required to repay liabilities to the creditors of that subsidiary_
and direct expenses in respect of the asset _any sale and tax costs, as incurred_,
will be used for repayment of the accumulated interest till that date in all of the
series _in case of an exit which is not one of the four shopping centres only 50%
of the interest_ and 78% of the remaining cash _following the interest payment_ will
be used for an early repayment of the close principal payments for each of the series
_A, B, Polish_ each in accordance with its relative share in the deferred debt. Such
prepayment will be real repayment and not in bond purchase.
_2_ On November 22, 2018 the Company announced based on its current forecasts, 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. The
Company may be able to partially pay the said principal depending, among other things,
on the actual sale of assets and taking into consideration the cash needs in accordance
with the scope of the forecasted activity.
2019
Following the announcement of the Company from January 2019, the Company repaid in
February 2019 circa EUR 400,000 _principal of circa EUR 250,000 and penalty interests
of circa EUR 150,000_ to its Series A and Series B. As provided for in the Settlement
Agreement, the bondholders approved the deferral of payment 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 18.2.2019 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 19.06.2019, and the payment date was fixed as of 01.07.2019. The Company
paid on the said date a total amount of circa EUR 1.17 million of which is only 42%
of the full amount of interest.NOTE 7:- BONDS _Cont._
On July 11, 2019, the Company announced that its Romanian subsidiary had signed a
binding agreement to sell land in Miercurea Ciuc, 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.
Accordingly, in December 2019, Company made a partial interest payment in amount of
circa EUR 0.6 million of which is only 13% of the full amount of interest.
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 0.25 million and to defer 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 0.25 million to EUR 0.5 million. 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 0.2 million and to defer all other unpaid scheduled Interest
payment. The amount reflected 1.84% of accrued interest as of that date.
2021
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 defer 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 defer all other unpaid interest. The amount reflected 0.92% of accrued
interest as of that date.
NOTE 7:- BONDS _Cont._
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 defer all other unpaid interest. The amount reflected 6.08% of accrued
interest as of that date.
2023
Further in 2023, the bondholders of Series A and Series B approved: _i_ to postpone
the final redemption date to January 1, 2024; _ii_ that on July 1, 2023 the Company
will pay to its bondholders a partial interest payment in the total amount of EUR
750,000 and to defer all other unpaid interest. The amount reflected 2.18% of accrued
interest as of that date.
On November 11, 2023, the bondholders of Series A and Series B approved: _i_ to postpone
the final redemption date to July 1, 2024; _ii_ that on January 1, 2024 the Company
will pay to its bondholders a partial interest payment in the total amount of EUR
200,000 and to defer all other unpaid interest. The amount reflected 0.51% of accrued
interest as of that date.
2024
Further in 2024, the bondholders of Series A and Series B approved: _i_ to postpone
the final redemption date to July 1, 2025.
2025
In 2024, the bondholders of Series A and Series B approved to postpone the final redemption
date to January 1, 2026 and further to postpone the final redemption date to July
1, 2026.
As detailed in Note 1_b_ the Company expects that it will not be able to meet its
entire contractual obligations in the following 12 months.
Accordingly, it intends to request the bondholders of both series to postponement
of the repayment of the remaining balance of the Bonds.
d. Covenants:
The bonds' covenants are detailed in Note 15_b__1_.
In respect of the Coverage Ratio Covenant _"CRC"_, as defined in the restructuring
plan, as at December 31, 2025 the CRC is not in compliance with 118% minimum ratio
required.
NOTE 7:- BONDS _Cont._
e. Credit rating:
In January 2018, Standard _ Poor's Maalot, the Israeli credit rating agency which
is a division of International Standard _ Poor's has discontinued tracking Plaza's
rating at the Company's request.NOTE 8:- INCOME TAXES
a. Unrecognized deferred tax assets:
Deferred tax assets have not been recognized in respect of tax losses due to the fact
it is not probable that future taxable profit will be available against which the
Group can utilize the benefits.
Tax losses are mainly generated from operations in the Netherlands. Tax settlements
may be subject to inspections by tax authorities. Accordingly, the amounts disclosed
in the financial statements may change at a later date as a result of the final decision
of the tax authorities.
b. Reconciliation of effective tax rate:
2025 2024
Dutch statutory income tax rate 25.8% 25.8%
Loss from continuing operations before income taxes _17,997_ _28,133_
Tax benefit at the Dutch statutory income tax rate _4,644_ _7,259_
Effect of tax rates in foreign jurisdictions 12 220
Current year tax loss and other timing differences for which no deferred taxes are
created 4,632 7,039
Tax Expense - -c. The main tax laws imposed on the Group companies in their countries
of residence:
The Netherlands:
a. Companies resident in the Netherlands are subject to corporate income tax at the
general rate of 25.8%. The first EUR 200,000 of profits is taxed at a rate of 19%.
Since January 1, 2022 onwards, an indefinite loss carry forward applies.
b. Starting January 1, 2022 losses will be offset _forward or backward_ in accordance
with the following restrictions:
1. Up to 1 million EUR - unlimited
2. Over 1 million EUR - against 50% of the remaining profit in that year
NOTE 8:- INCOME TAXES _Cont._
c. The Dutch participation exemption gives a full exemption from corporation tax applies
to benefits such as dividends and capital gains derived from a qualifying participation.
The participation exemption generally applies if the parent Company holds at least
5 percent of the shares in the participation. The
requirements to meet the participation exemption are as follows:
1. The parent Company has an interest of at least 5 percent in the participation;
and
2. At least one of the following three tests is met:
a_ The parent Company's objective with respect to its participation is to obtain a
return that is higher than a return that may be expected from normal active asset
management _"Motive Test"_; or
b_ The participation is subject to a "reasonable taxation" according to Dutch tax
standards _"Subject-to-Tax Test"_; or
c_ The direct and indirect assets of the participation generally consist of less than
50 percent of 'low taxed free passive investments' _"Asset Test"_.
NOTE 9:- EQUITY
December 31,
2025 2024
Remarks Number of shares
Authorized ordinary shares of par value EUR 1 each 10,000,000 10,000,000
Issued and fully paid 6,855,603 6,855,603
Restriction of dividend The Company shall not make any dividend distributions, unless
_i_ at least 75% of the Unpaid Principal Balance of the Bonds has been repaid and
the Coverage Ratio on the last Examination Date prior to such Distribution is not
less than 150% following such Distribution, or _ii_ a Majority of the Plan Creditors
consents to the proposed Distribution.
Notwithstanding the aforesaid, in the event an additional capital injection of at
least EUR 20 million occurs, then after one year following the date of the additional
capital injection, no restrictions other than those under the applicable law shall
apply to dividend distributions in an aggregate amount of up to 50% of such additional
capital injection.NOTE 10:- EARNINGS PER SHARE
The calculation of basic earnings per share _"EPS"_ at December 31, 2025 was based
on the loss attributable to ordinary shareholders of EUR 17,995 thousand _2024: loss
of EUR 28,133 thousand_ and a weighted average number of ordinary shares outstanding
of 6,856 thousand _2024: 6,856 thousand_.
Weighted average number of ordinary shares basic and diluted:
In thousands of shares with a EUR 1 par value December 31,
2025 2024
Issued ordinary shares at 1 January 6,856 6,856
Weighted average number of ordinary shares at 31 December 6,856 6,856
NOTE 11:- EMPLOYEE SHARE OPTION PLAN
Number
of options Number of options
2025 2024
Outstanding at the beginning of the year 1,200 5,120
Share options expired during the year _1,200_ _3,920_
Outstanding at the end of the year - 1,200
Exercisable at the end of the year - 1,200
During 2025 and 2024 there were no employee costs for the share options granted.
NOTE 12:- ADMINISTRATIVE EXPENSES
Year ended
December 31
2025 2024
Salaries and related expenses 336 338
Professional services _1_ 492 2,892
Offices and office rent 64 51
Travelling and accommodation 4 12
Others - 15
Total 896 3,308
_1_ Expenses include Arbitration costs incurred in 2025 in amount of circa 190 thousand
EUR _2024: 2,600 thousand EUR_.NOTE 13:- FINANCE INCOME AND FINANCE COSTS
Year ended
December 31
2025 2024
Foreign currency gain - other 54 -
Other finance income 38 121
Finance income 92 121
Interest expense on bonds _15,317_ _16,289_
Other finance expenses _12_ _15_
Foreign currency loss on bonds _including inflation_ _2,180_ _8,577_
Finance costs _17,509_ _24,881_
Net finance costs _17,417_ _24,760_
NOTE 14:- FINANCIAL INSTRUMENTS
Financial Risk Management:
Overview
The Group has exposure to the following risks from its use of financial instruments:
- Credit risk
- Liquidity risk
- Market risk
This Note presents information about the Group's exposure to each of the above risks,
the Group's objectives, policies and processes for measuring and managing risk, and
the Group's management of capital.
The Board of Directors has established a continuous process for identifying and managing
the risks faced by the Group _on a consolidated basis_, and confirms that it is responsible
to take appropriate actions to address any weaknesses identified.
The Group's risk management policies are established to identify and analyse the risks
faced by the Group, to set appropriate risk limits and controls, and to monitor risks
and adherence to limits. Risk management policies and systems are reviewed regularly
to reflect changes in market conditions and the Group's activities.
The Company's Audit Committee oversees how management monitors compliance with the
Group's risk management policies and procedures and reviews the adequacy of the risk
management framework in relation to the risks faced by the Group.
NOTE 14:- FINANCIAL INSTRUMENTS _Cont._
a. Credit risk:
Credit risk is the risk of financial loss to the Group if a counterparty to a financial
instrument fails to meet its contractual obligations, and arises principally from
the Group's financial instruments held in banks and from other receivables.
Management had a credit policy in place and the exposure to credit risk is monitored
on an ongoing basis.
Cash and deposits and other financial assets
The Group limits its exposure to credit risk in respect to cash and deposits, by investing
mostly in deposits and other financial instruments with counterparties that have a
credit rating of at least investment grade from international rating agencies. Given
these credit ratings, management does not expect any counterparty to fail to meet
its obligations.
b. Liquidity risk:
Liquidity risk is the risk that the Group will not be able to meet its financial obligations
as they fall due. For detailed information refer to Note 1_b_.
Liquidity risk
The following are the contractual maturities of financial liabilities, including estimated
interest payments and excluding the impact of netting agreements:December 31, 2025
Non-derivative financial liabilities Carrying amount Contractual cash flow 6 months
or less 6-12 months _*_
Bonds issued _*_ _176,668_ _176,668_ - _176,668_
Trade and other payables _143_ _143_ _143_ -
_176,811_ _176,811_ _143_ _176,668_ December 31, 2024
Non-derivative financial liabilities Carrying amount Contractual cash flow 6 months
or less 6-12 months _*_
Bonds issued _*_ _159,171_ _159,171_ - _159,171_
Trade and other payables _348_ _348_ _348_ -
_159,519_ _159,519_ _348_ _159,171_
_*_ Refer to Note 7.
NOTE 14:- FINANCIAL INSTRUMENTS _Cont._
c. Market risk:
Currency risk:
Currency risk is the risk that the Group will incur significant fluctuations in its
profit or loss as a result of utilizing currencies other than the functional currency
of the respective Group Company.
The Group is exposed to currency risk mainly on borrowings _Bonds issued in Israel_
that are denominated in NIS.
The following exchange rate of EUR/NIS applied during the year:
Reporting date
Average rate Spot rate
EUR 2025 2024 2025 2024
NIS 1 0,257 0,250 0,267 0,263
NIS denominated bonds - a change of 5 percent in EUR/NIS rates at the reporting date
would increase/decrease loss by circa EUR 5 million, as a result of having issued
NIS linked Bonds.
This effect assumes that all other variables, in particular CPI index, remain constant.
Interest Rate Risk _including inflation_:
The Group's interest rate risk arises mainly from Bonds issued at fixed interest rate
expose the Group to changes in fair value, if the interest is changing. Pursuant to
the Company's Restructuring Plan, as described in note 7, the Company executes only
partial interests payments based on current sources and subject to approval of bondholders
of both series.
Sensitivity analysis - effect of changes in Israeli CPI on carrying amount of NIS
bonds
A change of 2,6 percent in Israeli Consumer Price Index _"CPI"_ at the reporting date
_and in 2024_ would have increased _decreased_ profit or loss by the amounts shown
below. This analysis assumes that all other variables, in particular foreign currency
rates, remain constant.
Profit _loss_ effect
For the year ended
December 31, Carrying amount of bonds CPI increase effect CPI
decrease effect
2025 101,890 _2,649_ 2,649
2024 104,040 _2,705_ 2,705
NOTE 14:- FINANCIAL INSTRUMENTS _Cont._
Shareholders' equity management:
Refer to Note 9 in respect of shareholders equity components in the restructuring
plan including dividend policy. The Company's Board of Directors is updated on any
possible equity issuance, in order to assure _among other things_ that any changes
in the shareholders equity _due to issuance of shares, options or any other equity
instrument_ is to the benefit of both the Company's bondholders and shareholders.
Fair values:
The table below is a comparison between the carrying amount and fair value of the
Company's financial instruments that are presented in the financial statements not
at fair value:
Carrying amount Fair value _*_
2025 2024 2025 2024
Bonds A at amortized cost - Israeli bonds 42,302 42,943 2,455 3,204
Bonds B at amortized cost - Israeli bonds 59,588 61,097 3,676 4,514_*_ The fair
value is based on Level 1 in fair value hierarchy and measured based on market quote.
Management believes that the carrying amount of cash, receivables and trade payables
approximate their fair value due to the short-term maturities of these instruments.NOTE
15:- CONTINGENT LIABILITIES AND COMMITMENTS
a. Contingent liabilities and commitments to related parties:
1. The Company entered into an indemnity agreement with all of the Company's directors
and senior management - the maximum indemnification amount to be granted by the Company
to the directors shall not exceed 25% of the shareholders' equity of the Company based
on the shareholders' equity set forth in the Company's last consolidated financial
statements prior to such payment. No consideration was paid by the Company in this
respect since the agreement was signed.
2. The Company maintains Directors' and Officers' liability cover, presently at the
maximum amount of USD 5 million for a term of 12 months commencing on May 1, 2025.
Pursuant to the terms of this policy, all the Directors and Senior Managers are insured.
NOTE 15:- CONTINGENT LIABILITIES AND COMMITMENTS _Cont._
b. Contingent liabilities and commitments to others:
1. As part of the completion of the restructuring plan _refer also to Note 7_, the
Group has taken the following commitments and collaterals towards the creditors:
a_ Restrictions on issuance of additional bonds - The Company undertakes not to issue
any additional bonds other than as expressly provided for in the Restructuring Plan.
b_ Restrictions on amendments to the terms of the bonds - The Company shall not be
entitled to amend the terms of the bonds, with the exception of purely technical changes,
unless such amendment is approved under the terms of the relevant series and the applicable
law and the Company also obtains the approval of the holders of all other series of
bonds issued by the Company by ordinary majority. Refer to Note 7 for recent amendments.
c_ Coverage Ratio Covenant _"CRC"_ - the CRC is a fraction calculated based on known
Group valuation reports and consolidated financial information available at each reporting
period. The CRC to be complied with by the Group is 118% _"Minimum CRC"_ in each reporting
period. For December 31, 2025 the calculated CRC is not in compliance with Minimum
CRC _also refer to Note 7_d_ regarding breach of covenant_. In the event that the
CRC is lower than the Minimum CRC, then as from the first cut-off date on which a
breach of the CRC has been established and for as long as the breach is continuing,
the Company shall not perform any of the following: _a_ a sale, directly or indirectly,
of a Real Estate Asset _"REA"_ owned by the Company or a subsidiary, with the exception
that it shall be permitted to transfer REA's in performance of an obligation to do
so that was entered into prior to the said cut-off date, _b_ investments in new REA's;
or _c_ an investment that regards an existing project of the Company or of a subsidiary,
unless it does not exceed a level of 20% of the construction cost of such project
_as approved by the lending bank of these projects_ and the certain loan to cost ratio
of the projects are met.
If a breach of the Minimum CRC has occurred and continued throughout a period comprising
two consecutive quarterly reports following the first quarterly/year-end report on
which such breach has been established, then such breach shall constitute an event
of default under the trust deeds, and the Bondholders shall be entitled to declare
that all or a part of their respective _remaining_ claims become immediately due and
payable.
d_ Minimum Cash Reserve Covenant _"MCRC"_ - cash reserve of the Company has to be
greater than the amount estimated by the Company's management required to pay all
administrative and general expenses and interest payments to the bondholders falling
due in the following six months, minus sums of proceeds from transactions that have
already been signed _by the Company or a subsidiary_ and closed and to the expectation
of the Company's management have a high probability of being received during the following
six months. MCRC is not maintained as of December 31, 2025.
NOTE 15:- CONTINGENT LIABILITIES AND COMMITMENTS _Cont._
e_ Negative Pledge on REA of the Company - The Company undertakes that until the bonds
have been repaid in full, it shall not create any encumbrance on any of the REA, held,
directly or indirectly, by the Company except in the event that the encumbrance is
created over the Company's interests in a subsidiary as additional security for financial
indebtedness _"FI"_ incurred by such subsidiary which is secured by encumbrances on
assets owned by that subsidiary.
f_ Negative Pledge on the REA of Subsidiaries - The subsidiaries shall undertake that
until the bonds have been repaid in full, none of them will create any encumbrance
on any of REA except in the event that:
_i_ the subsidiary creates an encumbrance over a REA owned by such subsidiary exclusively
as security for new FI incurred for the purpose of purchasing, investing in or developing
such REA; Notwithstanding the aforesaid, subsidiaries shall be entitled to create
an encumbrance on land as security for FI incurred for the purpose of investing in
and developing, but not for purchasing, an REA held by a different Group company _hereinafter:
a "Cross Pledge"_, provided the total value of the lands owned by the Group charged
with Cross Pledges after the commencement date of the plan does not exceed EUR 35
million, calculated on the basis of book value _the "Sum of Cross Pledges"_. When
calculating the Sum of Cross Pledges, lands that were charged with Cross Pledges created
prior to the commencement date of the plan or created solely for the purpose of refinancing
an existing FI shall be excluded. The Group did not have cross-pledge as of December
31, 2025.
_ii_ The encumbrance is created over an asset as security for new FI that replaces
existing FI and such asset was already encumbered prior to the refinancing. Any excess
net cash flow generated from such refinancing, shall be subject to the mandatory early
prepayment of 75%.
The encumbrance is created over interests in a Subsidiary as additional security for
FI incurred by such subsidiary which is secured by encumbrances on assets owned by
that subsidiary as permitted by sub-section _i_ above.
The encumbrance is created as security for new FI that is incurred for purposes other
than the purchase of and/or investment in and development of a REA, provided that
at least 75% of the net cash flow generated from such new FI is used for mandatory
early prepayment.
g_ Limitations on incurring new FI by the Company and the subsidiaries - The Company
undertakes not to incur any new FI _including by way of refinancing an existing FI
with new FI_ until the outstanding bonds debt _as of November 30, 2014_ have been
repaid in full, except in any of the following events:NOTE 15:- CONTINGENT LIABILITIES
AND COMMITMENTS _Cont._
_i_ the new FI is incurred for the purpose of investing in the development of a REA,
provided that: _a_ the Loan To Cost _"LTC"_ Ratio of the investment is not less than
50% _or 40% in special cases_; _b_ the new FI is incurred by the subsidiary that owns
the REA or, if the FI is incurred by a different subsidiary, any encumbrance created
as security for such new FI is permitted under the negative pledge stipulation above;
and _c_ following such investment the consolidated cash is not less than the MCRC;
_ii_ The new FI is incurred by a subsidiary for the purpose of purchasing a new REA
by such Subsidiary, provided that following such purchase the cash reserve is not
less than the MCRC.
_iii_ At least 75% of the net cash flow resulting from the incurrence of new FI is
used for a 75% early prepayment of the bonds. Subject to the terms of the plan, the
Group may also refinance existing FI if this does not generate net cash flow.
h_ No distribution policy - The Company's ability to pay dividend is limited unless
certain conditions are met.
i_ 75% mandatory early repayment - Refer to Note 7 and to other sections in this note
regarding changes in increase of repayment to 78%.
2. General commitments and warranties in respect of trading property disposals:
In the framework of the transactions for the sale of the Group's real estate assets,
the Group has provided indemnities which are customary for such transactions to the
respective purchasers.
Such indemnifications are limited in time and amount. No indemnifications were exercised
against the Group till the date of the statement and approval of the financial position
3. The Company is liable to the buyer of its previously owned shopping centre in the
Czech Republic _"NOVO"_ - sold in June 2006 - in respect to one of its tenants _"Tesco"_.
Tesco leased an area within the shopping centre for a period of 30 years, with an
option to extend the lease period for an additional 30 years, in consideration for
EUR 6.9 million which was paid in advance. According to the lease agreement, the tenant
has the right to terminate the lease agreement subject to fulfilment of certain conditions
as stipulated in the agreement.
In case Tesco leaves the mall before expiration of lease period the Company will
be liable to repay the remaining consideration in amount of EUR 1.29 million as of
balance sheet date, unless the buyer finds another tenant that will pay higher annual
lease payment than Tesco. The management does not expect to bear a material loss.
4. Contingent liabilities due to legal proceedings:
NOTE 15:- CONTINGENT LIABILITIES AND COMMITMENTS _Cont._
The Company is involved in litigation arising in the ordinary course of its business.
Although the final outcome of each of these cases cannot be estimated at this time,
the Company's management believes, that the chances these litigations will result
in any material outflow of resources to settle them is remote, and therefore no provision
or disclosure is required.
5. Lawsuit against entities involved in the sale of U.S. shopping centers in 2011:
In March 2018, a shareholder of the Company _hereinafter: "the Plaintiff"_ filed a
motion with the Economic Department of the District Court in Tel-Aviv to reveal and
review internal documents of the Company and of Elbit Imaging Ltd. _hereinafter: "Elbit"_
_hereinafter: "the Motion"_, in which the Court was asked to instruct the Company
and Elbit _hereinafter together: "the Respondents"_ to provide the plaintiff with
certain documents of the respondents in connection with the Casa Radio project in
Romania and with the sale of the U.S. Shopping Centers in 2011.
In February 2020, an agreement was reached between the Plaintiff and the Respondents
according to which the motion will be dismissed by consent and the plaintiff and the
respondents _hereinafter: "the Parties"_ will jointly examine the feasibility of the
lawsuit in connection with the above events.
In light of the aforesaid, an agreement was signed between the Plaintiff, the Respondents
and First Libra Israel Ltd. _hereinafter: "Libra"_ according to which Libra will finance
all the expenses of filing and managing of a new lawsuit by the Respondents against
certain parties _certain officers in the Respondents, a portion of the heirs of Motti
Zisser _the former controlling shareholder of the Respondents and other parties__
who were involved in the Respondents' transaction for the sale of real estate in the
United States in 2011 and for which funds _brokerage fees_ were allegedly illegally
transferred to private companies controlled by the late Mr. Motti Zisser _hereinafter:
"Financing Agreement" and "New Lawsuit", respectively_.
The parties to the Financing Agreement agreed, inter alia, that any consideration
received as a result of the New Lawsuit _to the extent received_ _hereinafter: "the
Lawsuit Funds"_ will first be used to reimburse Libra's expenses for the New Lawsuit
_plus interest and VAT_ and the balance after deduction of such expenses _hereinafter:
"the Balance of the Lawsuit Funds"_ will be divided among all those involved in the
New Lawsuit, so that each of the Company and Elbit will be entitled to circa 20.75%
of the Balance of the Lawsuit Funds.
In order to ensure the distribution of the Lawsuit Funds as stated above, both the
Company and Elbit signed lien documents in favor of Libra, the Plaintiff and the attorneys
representing them _hereinafter collectively: "the Eligibles"_ with respect to the
reimbursement of expenses and their portion in the Lawsuit Funds _hereinafter: "the
Lien"_.
On October 18, 2020 the parties filed the New Lawsuit _in the amount of circa NIS
60 million _approximately EUR 15 million__.
NOTE 15:- CONTINGENT LIABILITIES AND COMMITMENTS _Cont._
On February 2, 2021, Ran Shtarkman filied a motion to dismiss the lawsuit against
him in limine. On April 5, 2021, the court rejected the defendant Ran Shtarkman's
motion to dismiss the lawsuit against him in limine. An appeal that was filed to the
Supreme Court in respect of this decision was denied.
On April 4, 2021, one of the defendants, Philip Meyer, filed a motion for dismissal
in limine of the lawsuit against him. On August 10, 2021, the motion was accepted.
On November 14, 2021, the Company and Elbit filed an appeal to the Supreme Court upon
this court decision. In addition, Mr. Philip Meyer filed an appeal in respect of the
court expenses which were ruled in his favor in the court ruling. The Supreme Court
scheduled dates on submission of summaries by the parties and a court hearing with
regard to the appeals filed, to be held on May 11, 2023.
On September 14, 2021, the defendant David Zisser also filed a motion to dismiss in
limine the lawsuit against him. Following the Company's and Elbit's motions, on November
4, 2021, the court ordered that the discussion on the abovementioned motion will be
stayed until a decision of the Supreme Court on the appeal against Philip Meyer.
On May 31, 2023 the Company's and Elbit's appeal was accepted by Supreme Court and
a settelment agreement has been reached between Company, Elbit and the Respondents,
which was approved by the court.. According to the provisions of the settlement agreement,
the Company's portion after deducting expenses is a few hundred thousand euros and
was received partially in 2023. The Company and Elbit will continue to handle the
legal proceeding in the District Court while each party shall maintain all of its
claims in the main proceeding.
In the framework of the continued proceedings, preliminary discussions were held between
the parties. As a result, the plaintiffs and Mr. Philip Meyer have reached a mediation
agreement and on May 21, 2025. According to the provisions of the mediation agreement,
the Company's portion after deducting expenses was received in 2025 in amount of 370
EUR. Accordingly, the proceedings against all parties have been concluded.
6. Dutch statutory auditor:
As described in Note 2_a_ these consolidated financial statements are not intended
for statutory filing purposes. The Company is required to file consolidated financial
statements prepared in accordance with The Netherlands Civil Code. During 2019 the
Company has been informed by the audit firm, Baker Tilly _Netherlands_ N.V., that
they would cancel their license to audit public interest entities _such as the Company_
and that, as a consequence, they are not in the position to provide the Company with
their audit services for the 2019 statutory annual accounts. As a listed company,
the Company needs to engage a Dutch audit firm that is licensed to perform audits
for public interest entities. The choice for such firms in the Netherlands is very
limited as only six firms have the appropriate license.
NOTE 15:- CONTINGENT LIABILITIES AND COMMITMENTS _Cont._
Despite extensive effort of the Company to find a new Dutch auditor, none of those
six firms has been found prepared to accept the Company as their client. The Company
approached in writing the Dutch Ministry of Finance, The Royal Dutch Institute of
Chartered Accountants, the Authority for the Financial Markets to indicate the severe
adverse consequences the Company would suffer if this problem will not be solved but
none of those authorities has been able to find the solution. The Royal Dutch Institute
of Chartered Accountants has put considerable effort in helping the Company by approaching
audit firms and assessing their procedures for client acceptance but has no legal
possibilities at its disposal to force audit firms to accept a specific client. This
leaves the Company in the awkward position of not being able to meet its obligations
regarding the statutory audit.
The Company has proposed to the authorities various alternative solutions to get
the annual accounts of 2019 audited. It appeared that none of those are legally feasible
and none of the addressees came up with any alternatives. It is now time to emphasize
that the Company exhausted its sources to comply with the requirements of mandatory
Dutch law.
Due to the above and in order to avoid an outright violation of applicable stock
exchange regulations, the Company decided to engage EY Israel to audit its IFRS consolidated
annual accounts and to issue an auditors' report on those statements. The Company
submitted the annual consolidated financial statements as of December 31, 2019, December
31, 2020, December 31, 2021, December 31, 2022, December 31, 2023 and as of December
31, 2024 which were filed with the London Stock Exchange, the Warsaw Stock Exchange
and the Tel Aviv Stock Exchange, to the Authority for the Financial Markets and to
other relevant Dutch authorities.
As of the date of approval of these consolidated financial statements the Company
still didn't find any solution to have the annual accounts of 2019, 2020, 2021, 2022,
2023, 2024 and 2025 audited therefore, it will submit the annual consolidated financial
statements as of December 31, 2025 that are filed to the London Stock Exchange, the
Warsaw Stock Exchange and the Tel Aviv Stock Exchange, to the Authority for the Financial
Markets and to any other relevant Dutch authorities.
NOTE 16:- RELATED PARTY TRANSACTIONS
Related party transactions
Transactions between the Company and its subsidiaries have been eliminated on consolidation
and are not disclosed in this note. Details of transactions between the Group and
other related parties are disclosed below.
During the year, Group entities had the following trading transactions with related
parties that are not members of the Group:
Year ended
December 31,
2025 2024
Costs and expenses
Compensation to key management personnel 55 59
Compensation to board members _1_ 238 240
The amounts disclosed in the table are the amounts recognised as an expense during
the reporting period related to key management personnel.
_1_ 2025 - two board members; 2024 - two board members.
Year ended
December 31,
2025 2024
Other liabilities
Amounts due to directors and key management personnel 40 33
As of December 31, 2025, the Company identified Davidson Kempner Capital Management
LLC _"DK"_ among the Company's related parties.
DK holds 26.3% of the Company's outstanding shares of the Company as of the reporting
date. DK has no outstanding balance as of the reporting date with any of the Group
companies.
NOTE 17:- DISCLOSURE OF MATERIAL EVENTS AFTER THE REPORTING PERIOD
a. Appointment of the Company's auditor:
On January 15, 2026 the Company announced that, the Board of Directors of the Company
decided to reappoint KOST FORER GABBAY _ KASIERER _a member of the global network
of EY firms_ as the audit company authorized to audit the consolidated financial statements
of the Company for the year ended December 31, 2025 in order to ensure the reporting
requirements and enable the Company's proper operations.
b. Update regarding arbitrations against Romania with respect to the "Casa Radio"
project:
On January 16, 2026 the Company announced that, regarding the ongoing arbitration
proceedings before the International Centre for the Settlement of Investment Disputes
initiated by the Company in relation to the Casa Radio / Dâmbovia Center Project in
Bucharest, and further to the Company's request for an update on the expected timing
of the Tribunal's award, the Tribunal has indicated that its award is anticipated
to be issued in April 2026.
NOTE 18:- LIST OF GROUP ENTITIES
As of December 31, 2025, the Company owns the following companies _all are 100% held
subsidiaries at the end of the reporting period presented unless otherwise indicated_:
ACTIVITY REMARKS
ROMANIA
Indirectly or jointly owned
Dambovita Center S.R.L. Mixed-use project 75% held by Dambovita Centers Holding B.V.
Casa Radio project
THE NETHERLANDS
Directly wholly owned
Plaza Dambovita Complex B.V. Holding company
Plaza Centers Enterprises B.V. Finance company 100% held by Plaza Dambovita Complex
B.V.
Mulan B.V. _Fantasy Park Enterprises B.V._ Holding company Holds Fantasy Park subsidiaries
in CEE
Plaza Centers Management B.V. Holding company
Dambovita Centers Holding B.V. Holding company 100% held by Plaza Centers N.V.- -
- - - - - - - - - - - - - - - - -
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UNI-EN: RESULTS FOR THE YEAR ENDED 31 DECEMBER 2025
