PLAZA CENTERS NV (12/2019) RESULTS FOR THE YEAR ENDED 31 DECEMBER 2018 FURTHER PORTFOLIO REPOSITIONING & DELEVERAGING

Podstawa prawna: Plaza Centers N.V. ("Plaza" / "Company" / "Group") today announces its results for the year ended 31 December 2018.

Financial highlights:

• Reduction in total assets to €62 million (31 December 2017: €141 million) as a result of the Company's deleveraging including principal repayments and the redemption in full of Series of bonds issued in Poland in total amount of €40.1 million

• Book value of the Company's Trading properties decreased by €31 million to €42.6 million over the period, due to disposals (land plots in Poland and Serbia, and disposal of shares of SPV holding plot in Greece) in line with the restructuring plan and an impairment of €29.5 million of Trading Properties in Romania, Poland, Greece and Serbia

• Consolidated cash position as at December 31, 2018 decreased to €1.4 million (31 December 2017: €44.8 million) and current cash position of circa €1.28 million

• Revenue from disposal of trading properties totaled €2.3 million (2017: €193 million) in line with the Company's disposal program

• €31.7 million loss recorded at an operating level (December 31, 2017: €15 million) where a loss from selling trading properties was increased by write-down of trading properties and decreased administrative expenses

• Administrative Expenses reduced to €2.7 million in 2018 due to cost cutting of professional services and manpower (2017: €6.15 million)

• Losses increased to €38.4 million in 2018 from €26.6 million in 2017 as the write down of trading properties increased by €18 million, while net finance expense were €7.7 and €10.6 million, respectively

• Basic and diluted loss per share of €5.60 (December 31, 2017: loss per share of €3.87)

Progress in portfolio rationalisation and financial highlights:

During 2018 Plaza received gross proceeds of €2.3 million from sales transactions, price adjustments and other income. The disposals form part of the Company's ongoing strategy to reduce the Company's debt.

Settlement agreement with the Bondholders:

In January 2018, a settlement agreement was reached and approved (and all the conditions precedent in the agreement fulfilled) between the holders of two Series of Israeli Bonds and the Company regarding the allocation of funds, to be repaid by the Company, across the Israeli Bonds Series. As a result, the Series A Bondholders withdrew 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 had no effect on the Polish Bondholders. On January 31, 2018 the Company paid the bondholders a total amount of principal and interest of €38.5 million.

Retirement of Chief Executive Officer:

On 11 January 2018, the Company announced that the CEO, Dori Keren, would retire from his position at the end of March 2018. The Board of Directors appointed Avi Hakhamov, who has been with the Company for more than 11 years, as Acting CEO commencing 1 April 2018.

Ceasing of rating by S&P

On 18 January 2018, S&P Maalot announced that it ceases updating the rating of the Company's bonds following the Company's request.

Motion to reveal and review internal documents:

In March 2018, a Shareholder of the Company has filed a motion with the Financial Department of the District Court in Tel-Aviv to reveal and review internal documents of the Company and of Elbit Imaging Ltd., with respect to the events surrounding that certain agreements that were signed in connection with the Casa Radio Project in Romania and the sale of the US portfolio. Such events were previously announced by the Company and are detailed in the notes to consolidated financial statements as of December 31, 2018. In July 2018, the Company has filed a response to the relevant court. The case is still pending at court. For further information see Note 17(6).

Redemption of the Polish Bonds:

In May 2018, further to the decision of the Israeli Series A and Series B Bondholders, the Company has redeemed in full the series of bonds issued in Poland at their principal amount together with interest accrued to the maturity date in total amount of €2.66 million. Upon completion of the redemption, the Company has no outstanding bonds issued in Poland.

Earn-out payment for the sale of Torun:

In June 2018, the Company received the earn-out payment for the sale of Torun Plaza totaling €0.35 million, reduced by NAV adjustment of €0.14 million.

Sale of a plot Lodz, Poland ("Lodz Centrum Plaza"):

In July 2018, a subsidiary of the Company has signed a preliminary agreement with respect to the sale of a 4,000 sqm plot of land in Lodz, Poland known as "Lodz Centrum Plaza", in consideration for PLN 1.3 million (circa €0.3 million). The plot was sold in September 2018.

Update on disposal of land plot in Miercurea Ciuc, Romania:

Further to the Company's announcement dated October 17, 2018 regarding signing the pre-agreement for the sale of land plot in Miercurea Ciuc, Romania, the Company grant an option for the purchase of the Plot till mid-April 2019 for a total consideration of €0.11 million. The Company has received €95,000 in 2018 and an additional €15,000 in 2019 (Non-refundable payments). In March 2019, following negotiations with the purchaser, the parties agreed that (i) the signing date of a definitive agreement will be postponed by 3 months to mid-July 2019, (ii) the receipt of non-refundable advance payments of €250,000 in two tranches by the end of April 2019, and; (ii) the sale price will be increased by €30,000.

To the extent that the Company will enter into a definitive agreement and consummates the transaction, the Company expects to receive €1.47 million (including non-refundable advanced payments).

Sale of a plot in Krusevac, Serbia:

On December 3, 2018 the Company announced that it completed the sale of its (indirectly) 100% stake in a 5-acre plot in Krusevac, Serbia, for a total consideration of approximately €0.29 million which is slightly below book value.

Preliminary Sale Agreement of Plot in Lodz, Poland:

On June 13, 2017, the Company announced that it has signed a preliminary sale agreement for the disposal of a 13,770 sqm plot at its second land holding in Lodz, Poland, (representing 22% of this holding) to a retail developer, for €1.15 million. As part of the agreement, the purchaser paid an immediate installment of €0.035 million followed by an installment of €0.073 million paid on 2018 after obtaining environmental permit for investing in the access road to the plot.

During February 2019 the Company has signed conditional sale agreement for which the remaining balance less 50% of the sum invested in the road (up to maximum amount of circa €0.19 million) will be paid once the final agreement is signed after the municipality confirms that it will not exercise pre-emptive rights. The rest of consideration (circa €0.84 million) will be paid in two instalments: €0.75 million at the date of the signing of the final sale agreement and the remaining amount of €0.09 million till the end of April 2019.

Disposal of land plot in Greece:

On December 24, 2018 the Company signed a definitive agreement for the sale of its (indirectly) 100% stake in a Greek subsidiary (on an "as is" basis) for a total gross amount of €1.05 million (out of which €0.3 million has already been received as advance payments during 2017). The total net proceeds to the Company, following the deduction of working capital adjustments in accordance with the balance sheet of the SPV and transaction costs, were circa €0.66 million.

As a result of the transaction, an amount €1.05 million is recorded in Revenue from disposal of trading properties and amount of circa €2.28 million is recorded in Cost of trading properties sold. In addition, as a result of sale on "as is" basis, the Company reversed tax liability previously recorded in the financial statements resulted in tax benefit of €1.015 million.

Belgrade Plaza:

On January 26, 2017, the Company signed a binding share purchase agreement with BIG Shopping Centers Ltd ("BIG"), for the sale of the SPV holding Belgrade Plaza shopping and entertainment centre. The final agreed value of Belgrade Plaza, which comprise circa 32,300 sqm of GLA, will be calculated based on a general cap rate of 8.25% as well as the sustainable NOI after 12 months of operation. The NOI will be re-examined again after 24 months and 36 months of operation, which may lead to an upward adjustment of the final purchase price.

During June 2018 (the first adjustment date) the First purchase price adjustment was examined and accordingly no additional proceed was made.

During December 2018, BIG paid €466,000 for the stands and signage at the Big Fashion mall in Belgrade (previously known as "Belgrade Plaza"). In addition, BIG further informed us that they intend to hold an additional €1 million until an orderly engineering examination of the mall's technical conditions is completed as part of the final Price adjustment to be performed in May 2020. The Company is currently evaluating its options regarding BIG's intention to hold the €1 million which was not recorded in the consolidated financial statements due to uncertainty related to receipt of such amount.

Update re 2012 Disposal of Shopping Centers in the US:

On December 20, 2018 Plaza Centers announced that following its announcement of 21 November 2017, and the review concluded in 2018 by the Financial Conduct Authority (FCA), no retrospective disclosures or other actions are required under the FCA's Listing Rules in relation to this matter.

Elbit Imaging announces it is no longer the Controlling Shareholder of Plaza Centers:

Elbit Imaging Ltd. (TASE, NASDAQ: EMITF) ("Elbit") informed in December 2018, that it has signed a trust agreement according to which Elbit will deposit its shares of Plaza Centers N.V (the "Shares" and "Plaza", respectively) with a trustee. In accordance with the trust agreement, Elbit retains the right to receive any and all rights in connection with the Shares, other than the voting rights which are vested with the trustee for all matters and purposes effective from December 18, 2018. In addition, Elbit may instruct the trustee, from time to time, to sell all or any portion of the Shares. The trust agreement shall terminate upon the earlier of: (i) a sale of all of the Shares to a third party; and (ii) the date on which actions have been taken for realization of any of the liens Elbit granted in favor of the holders of the Series I Notes issued by Elbit. The outcome of the above mentioned is that Elbit no longer considers itself to be the controlling shareholder of Plaza and accordingly will not consolidate Plaza's financial reports in its own financial reports.

Sale agreement of plot in Bangalore, India:

In June 2017, Elbit Plaza India Real Estate Holdings Ltd. ("EPI") (in which Plaza holds a 50% stake with its joint venture partner, Elbit Imaging Ltd.) signed a revised sale agreement with the former partner (the "Purchaser"). In January 2018, the Purchaser has notified EPI that due to a proposed zoning change (initiated by the Indian authorities) which could potentially impact the development of the land, all remaining payments under the Agreement will be stopped until a mutually acceptable solution is reached on this matter. EPI has rejected the Purchaser's claims, having no relevance to the existing Agreement, and started to evaluate its legal options. INR 46 Crores (approximately €6.06 million) were paid till March 2018.

In March 2018, the Company signed an amended revised agreement as follows: The Purchaser and EPI have agreed that the total purchase price shall be increased to INR 350 Crores (approximately €44.5 million). The Final Closing will take place on 31 August 2019 when the final installment of circa INR 212 Crores (approximately €26.9 million) will be paid to EPI against the transfer of the outstanding share capital of the SPV.

If the Purchaser defaults before the Final Closing, EPI is entitled to forfeit all amounts paid by now by the Purchaser as stipulated in the revised agreement. All other existing securities granted to EPI under the previous agreements will remain in place until the Final Closing.

On February 4, 2019 Plaza announced that the Purchaser defaults on payments and that EPI is considering all legal measures available to it to protect its interest.

During March, 2019, Plaza announced that the Purchaser has further paid to EPI INR 9.25 cores (approximately €1.15 million), thereby having paid approximately INR 80 crores (approximately €10.26 million) as against approximately INR 92 crores (approximately €11.8 million) that was supposed to be paid by end of February 2019. The Parties continue to discuss regarding getting further payments. Plaza part from the consideration is 50%.

Regarding Environmental update on Bangalore project and the implications on the net realisable value refer to Note 6 (b) (1) in the consolidated financial statements and key highlights below.

Sale agreement of plot in Chennai, India:

In July 2018, Elbit Plaza India Real Estate Holdings Limited ("EPI"), has signed a term sheet with its local partner ("Buyer"), relating to the sale of EPI's Indian subsidiary ("SPV") that holds 74.7-acre plot in Chennai, India ("Term Sheet"). Under the terms of the Term sheet, the Buyer shall have 60 (sixty) days to conduct due diligence only with respect to the SPV, following which definitive agreements, for the sale of the SPV in consideration of approximately €13.2 million (INR 1,060 million, the Company's share approximately €6.6 million), (subject to adjustment with respect to the previous deposit that was placed and the existing cash in the SPV level), shall be signed and closing shall take place on the same day. The closing of the transaction was expected in February 2019. As the transaction was not completed the Term Sheet was terminated by EPI.

In February 2019 the Chennai Project SPV issued notice to the buyer terminating the Joint Development Agreement ("JDA") due to its failure to obtain the access road. The said termination of JDA has been disputed by the Buyer. Therefore, the Chennai Project SPV has initiated arbitration proceeding against the Buyer in accordance with the Arbitration Rules of the Singapore International Arbitration Centre, in accordance with the JDA Agreement to protect its rights.

Key highlights since the period end:

Next payment to the holders of series A and series B bonds:

On February 18, 2019 the company paid principal of circa €250,000 and penalty interest on arrears of €150,000 following the bondholder's approval for the deferral of certain principal payments to July 1, 2019 instead of December 31, 2018.

Pre-agreement for the sale of land plot in Brasov, Romania:

On February 5, 2019 the Company has signed a Pre-Agreement for the sale of a plot in Brasov, Romania for a total gross amount of €620,000 which is slightly above the last reported book value. The consummation of the Transaction (which will take place not later than January 15, 2020) is subject to the fulfillment of certain conditions, including, inter alia: (i) the former financing bank of the Project did not exercise its right to purchase the Property until December 6, 2019; (ii) successful conclusion by the potential purchaser of its due diligence investigations; and (iii) the execution of definitive agreement.

As of the date hereof, there can be no certainty that a definitive agreement will be signed and/or that the Transaction will be consummated.

Environmental update on Bangalore project - India:

On May 4, 2016, the National Green Tribunal ("NGT"), an Indian governmental tribunal established for dealing with cases relating to the environment, passed general directions with respect to areas that should be treated as "no construction zones" due to its proximity to water reservoirs and water drains ("Order"). The restrictions in respect of the "no construction zone" are applicable to all construction projects.

The government of Karnataka had been directed to incorporate the above conditions in respect of all construction projects in the city of Bangalore including the Company's project which is adjacent to the Varthur Lake and have several storm-water crossing it.

An appeal was filed before the Supreme Court of India against the Order. On March 2019, the Supreme Court has set aside the Order thereby restoring the position as it existed before the Order was passed by NGT.

Non-binding agreement for the sale of the Company's indirect shareholdings in the Dambovita Center Project ("CASA RADIO"):

On February 11, 2019 the Company signed a non-binding Letter of Intent ("LOI") with AFI Europe N.V. (the "Purchaser", and together with the Company, the "Parties"), for the sale of its entire indirect shareholdings (75%) in the Casa Radio Project, for a maximum consideration of €60 million, subject to the fulfilment of certain conditions.

Following the execution of the LOI, the Purchaser shall have a period of 3 months to conduct due diligence investigations (with the aim of concluding the due diligence investigations before April 19, 2019), after which, if satisfactory, a pre-sale agreement will be executed within 30 days following the conclusion of the due diligence investigations (the "Pre-Sale Agreement").

In the framework of the Pre-Sale Agreement, the Purchaser will pay the Company a non-refundable down payment 15 months following the execution of the Pre-Sale Agreement, and subject to the satisfactory fulfilment of certain conditions precedent, the Parties will sign a sale agreement.

The consummation of the Transaction is subject to the fulfilment of certain conditions ("the closing conditions"), including, inter alia: (i) certain confirmations and approvals of competent public authorities regarding the PPP agreement in place and acceptance of the Purchaser; (ii) the successful conclusion by the Purchaser of its due diligence investigations; (iii) obtaining the approval of the Romanian authorities for the updated structure of the Project and timetable; (iv) confirmation that the 49-year lease period under the PPP agreement (signed between the Romanian Authorities and the Company) will commence from 2012 at the earliest, although, should the said lease period commence earlier, the parties shall amicably negotiate a price adjustment mechanism to the Purchaser's satisfaction and approval; and (v) the execution of definitive agreements.

During the period commencing on the date of the execution of the LOI and ending on the earlier of: (i) 18 month, or (ii) the Purchaser informs the Company of his withdrawal from the Transaction, the Company and its representatives have undertaken to refrain from negotiating with any other third party other than the Purchaser for the purpose of selling its shareholdings in the Project.

The payment schedule according to the LOI is expected to be set as follows:

Non-refundable down payment €200,000

Execution of Sale Agreement (following fulfilment of the conditions precedent) €20,000,000

Issuance of Building Permit for Phase 1 (the construction of the shopping mall, offices/residential, Hotel& Casino, Supermarket and parking). €22,000,000

Finalization and inauguration of Phase 1 €17,800,000

The Company is not obligated to participate in the financing of the Project. In addition, the Purchaser acknowledged the liability to build the public authority building under the PPP agreement.

As of the date hereof, there can be no certainty that either the Pre-Sale Agreement, or the Sale Agreement will be executed and/or that the Transaction will be consummated as presented above or at all.

Refer to the Company's financial statements section for additional information.

Commenting on the results, acting CEO Avi Hakhamov said:

"Our active focus has continued to centre on asset disposals in CEE (including signing pre-agreements for future sales), continuing efforts to realize projects in India and generating cash flows, material cost cutting, tight budget control and the optimisation of the business with the aim of satisfying our obligations to our stakeholders. This remains our absolute priority for the next year."

For further details, please contact:

Plaza

Avi Hakhamov, acting CEO

+ 361 6104523

Notes to Editors

Plaza Centers N.V. (www.plazacenters.com) is listed on the Main Board of the London Stock Exchange, as of 19 October 2007, 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. Plaza Centers N.V. has no obligation to update the statements contained in this press release, unless required by law.

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