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PLAZACNTR (PLZ): RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2017 - CORRECTED

UNI - EN REPORT No36/2017

Plaza Centers N.V. (“Plaza” / “Company” / “Group”), an emerging market property developer, today announces its results for the six months ended 30 June 2017. The below results have not been reviewed by the auditor of the Group.

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Financial highlights:

• Reduction in total assets to €222 million as a result of the Company’s portfolio repositioning and deleveraging strategy (31 December 2016: €322 million)

• Book value of the Company’s Trading properties and investment in Equity accounted investees decreased by €101 million to €193 million over the period, due to disposals (mainly Suwalki Plaza (Poland) and Belgrade Plaza (Serbia)) in line with the restructuring plan

• Consolidated cash position as at June 30, 2017 (including restricted bank deposits) decreased to €11 million (31 December 2016: €12.8 million) and current cash position of circa €32.5 million (€2.7 million restricted)

• €3.6 million profit recorded at operating level (30 June 2016: €4.1 million loss) including gain from selling of trading properties and profit from operation active shopping centres, according to the reclassified presentation as described in the financial review section

• Losses remained on the same level compared to the same period in 2016 (€6.8 million in first half of 2017 versus a loss of €6 million in the first six months of 2016), where net finance expense being €10.6 and €10 million, respectively

• Basic and diluted loss per share of €0.99 (June 30, 2016: loss per share of €0.89)

• Slight decrease in LTV to 87% (31 December 2016: 89%)

Restatement of 2016 financial statements:

Bonds issued by the Company include several covenants, some of which allow the bondholders to demand immediate repayment in certain circumstances. In particular, the bondholders may ask for immediate repayment where there has been a material deterioration in the Company's business as compared to its situation at the time of the 2014 restructuring plan; and where there is substantial suspicion that the Company will be unable to repay the bonds on time. As of December 31, 2016, there are significant risks and uncertainties pertaining to the achievement of the Company’s cash flow forecasts, which include the occurrence of events, which are beyond the Company’s sole control. The Company's financial statements as of September 30, 2016 includes an auditor's opinion with emphasis of matter to going concern uncertainty. As a result, there is a risk that the bonds holders could argue there exists a substantial suspicion with respect to the Company's ability to repay its obligations that entitles them to immediate repayment. Accordingly, the Company has restated its 2016 annual financial statements in order to present these facts correctly.

It should be noted that, irrespective of any restatement and or any reference to the phrases “re-audit”, “audit”, “restatement”, “reviewed” of financial statements for the year 2016, the financial statements for the year 2016 that were published on June 12, 2017 and adopted by the Company’s general meeting of shareholders on July, 31 2017, are the only official and valid financial statements as of the year ended on 31 December 2016. These financial statements have not been amended. No other document should be relied upon.

Progress in portfolio rationalisation:

In the first six months of 2017 and to the date of this announcement, Plaza received net proceeds of €87 million from sales transactions. The disposals form part of the Company’s ongoing strategy to reduce the Company’s debt.

Disposal of a plot in Belgrade, Serbia:

In June 2016, the Company sold its wholly owned subsidiary, which held the "MUP" plot in Belgrade, Serbia, for €15.75 million in cash. The purchaser paid €11.3 million in cash at the time of the sale agreement, a further €4.05 million was paid in January 2017, and the remaining €0.4 million was received in September 2017.

Furthermore, the Company was entitled to an additional contingent consideration of €0.6 million once the purchaser successfully develops at least 69,000 sqm above ground. The consideration was received in September 2017. Upon the receipt of each stage payment, in line with the Company's stated restructuring plan, 75% of the net cash proceeds has been and will be distributed to the Company's bondholders in the following quarter.

Disposal of a plot in Lodz, Poland:

On September 28, 2016, the Company completed the sale of a 20,700 sqm plot of land in Lodz, Poland, to a residential developer, for €2.4 million in cash. Following this transaction, the Company owns a remaining 4,000 sqm site.

The Company received €1.44 million in 2016 in instalments, and a final instalment of €0.96 million was received in June 2017. In line with the Company's stated restructuring plan, 75% of the net cash proceeds from the sale of the plot were distributed to the Company's bondholders.

Sale agreement of Suwalki Plaza:

In January 2017, The Company sold its SPV holding in Suwałki Plaza shopping and entertainment centre in Poland for €16.7 million. The purchaser was an investment fund which is connected to a former employee of the Company. Out of the net proceeds, at least 75% were distributed to the Company's bondholders in March 2017, in line with the Company's stated amended restructuring plan.

Final agreement for the sale of Belgrade Plaza:

On January 26, 2017, the Company signed a binding share purchase agreement with BIG Shopping Centers Ltd., a publicly traded company listed in the TA 100 Index, for the sale of the SPV holding Belgrade Plaza shopping and entertainment center.

The shopping center, which was over 97% pre-let, opened on 20th of April 2017 and the Company had remained responsible for the development and leasing of the asset until the opening.

Upon completion of the transaction, the Company has received an initial payment of EUR 31.2 million from the purchaser, further EUR 2 million has been received following the opening and further payments are contingent upon certain operational targets and milestones being met. The Purchaser has provided a guarantee to secure these future payments.

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, which the Company estimates will be approximately EUR 7.2-7.5 million per annum, after 12 months of operation.

Further instalments will be due to the Company during the first year of operation based on this 12-month figure. 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.

The Company has received a further payment of EUR 13.35 million during September 2017 based on the SPA on account of the final proceed which will be calculated one year following the opening of the mall, subject to price adjustments in the next two years. As a result, the company recorded a gain from the sale in amount of circa EUR 3.3 million. Expected future purchase price adjustment are not recognised. At least 75% of the net proceeds received from the disposal were distributed to the Company's bondholders in March 2017, and following the receipt of any future additional payments, in line with the Company's stated Amended Plan, 75% will be paid to the bondholders.

Sale of office building in Hungary:

On February 16, 2017, the Company signed an agreement for the sale of its SPV holding in David House, an office building in Budapest, to private investors for a gross amount of €3.2 million. Out of the net proceeds, at least 75% were distributed to the Company's bondholders in March 2017, in line with the Company's stated Amended Plan.

Sale of Shumen plaza project, Bulgaria:

On February 23, 2017, the Company announced that it had concluded the sale of a 26,057 sqm plot of land in Shumen, Bulgaria, for circa €1 million, which is slightly above book value. Of the net proceeds, at least 75% were distributed to the Company's bondholders in March 2017, in line with the Company's stated Amended Plan.

Compliance of the Early prepayment term:

On March 15, 2017, the Company paid its bondholders a total amount of NIS 191.74 million (€49.2 million) as an early redemption and, accordingly, upon such payment the Company complied with the early redemption with a total sum of at least NIS 382,000,000 and thus obtained a deferral of one year for the remaining contractual obligations of the bonds.

Suspension of trading of ordinary shares and Series A Notes and Series B Notes:

Under the Dutch Civil Code, being mandatory law of the Company’s home state, the Company shall publish its stand-alone and consolidated financial statements within four months from the end of the book year. The Company did not comply with this requirement and published the financial statements over the year ended on 31 December 2016, on 12 June 2017 and its ordinary shares were suspended from trading, with effect from 2 May 2017, on the London Stock Exchange's main market for listed securities until 18 May 2017. As a result of the aforementioned suspension, Plaza's ordinary shares were suspended from trading on the Warsaw Stock Exchange and Plaza's ordinary shares and its Series A Notes and Series B Notes were suspended from trading on the Tel Aviv Stock Exchange. On May 18, 2017 the Company announced that, with effect from 10.30 a.m. (London time), its ordinary shares were restored to trading on the London Stock Exchange's main market for listed securities and to listing on the Official List of the Financial Conduct Authority. Plaza's ordinary shares and its Series A Notes and Series B Notes were also restored to trading on the Tel Aviv Stock Exchange. On May 19, the ordinary shares were restored to trading on the Warsaw Stock Exchange. Trading of the Company's ordinary shares, Series A Notes and Series B Notes were in 2017 also for a period temporarily suspended from trading on the relevant exchanges. As a result, the bondholders may be entitled to declare that all or a part of their respective (remaining) claims become immediately due and payable.

Preliminary Sale 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 €1.2 million. As part of the agreement, the purchaser will pay advance payments totalling 10% of the sale price. The remaining balance will be paid once a building permit has been obtained for development of the land which is expected to be granted within 12-15 months from the signing of this preliminary sale agreement. In line with the Company's stated amended restructuring plan, 75% of the net cash proceeds will be distributed to Plaza's bondholders.

New payment structure for sale of project in Bangalore, India

On 16 June 2017, further to its announcement on 15 November 2016, that its jointly controlled subsidiary Elbit Plaza India Real Estate Holdings Limited (in which Plaza holds a 50% stake with its joint venture partner, Elbit Imaging Ltd.) (“EPI”) signed a revised agreement in relation to the sale of a 100% interest in a special purpose vehicle which holds a site in Bangalore, India, to a local investor (the “Purchaser”). The Purchaser and EPI agreed that the purchase price will be amended to INR 338 Crores (approximately €47 million) instead of the INR 321 Crores (approximately €44.6 million) agreed in the previous agreement. As part of the agreement, INR 110 Crores (approximately €15.3 million) was agreed to be paid by the Purchaser in instalments until the Final Closing. The Final Closing will take place on 1 September 2018 when the final instalment of INR 228 Crores (approximately €31.7 million) will be paid to EPI. If the Purchaser defaults before the Final Closing, EPI is entitled to forfeit certain amounts paid by the Purchaser as stipulated in the revised agreement. All other existing securities granted to EPI under the previous agreement will remain in place until the Final Closing.

Final agreement for the sale of Kielce Plaza, Poland:

On June 19, 2017, The Company announced that it has signed the final sale agreement for the disposal of its 2.47-hectare plot in the centre of Kielce, Poland, for €2.28 million. In line with the Company's stated amended restructuring plan, 75% of the net cash proceeds has been distributed to Plaza's bondholders.

Signed Letter of Intent for the sale of Toruń Plaza in Poland

On 21 June 2017 Plaza announced that its subsidiary, Plaza Centers Polish Operations B.V., signed a non-binding Letter of Intent (“LOI”) with an investment fund (the “Purchaser”) regarding the sale of Torun Plaza shopping and entertainment centre in Poland. The LOI bound the Purchaser to a strict timeline for undertaking a comprehensive due diligence process which would result in the transaction being completed by the middle of September 2017. Should the transaction proceed towards a signed share purchase agreement, following the due diligence process, Plaza supposed to receive circa €70 million gross payment followed by additional payments up to a maximum potential amount of €4 million after additional earn out period following the closing of the transaction. The expected net proceeds to the Company, following the repayment of the related bank loan are estimated to be circa €27-29 million. On 30 August 2017 Plaza updated the market that the completion of the transaction had been postponed and is now expected to conclude in the fourth quarter of this year

Appointment of new auditor

On 29 June 2017, Plaza announced that, following the conclusion of a formal tender process led by the Company's Audit Committee, the Board of the Company approved the appointment of Kost Forer Gabbay & Kasierer, the largest accounting firm in Israel and a member of Ernst & Young Global, as its new IFRS auditor. The Company’s general meeting of shareholder shall appoint the Dutch statutory auditor for the year 2017, who will audit the statutory annual accounts (comprising stand-alone accounts and consolidated (IFRS) accounts). At the date of this document, such appointment has not been made.

Key highlights since the period end:

Completed sale of plot in Poland:

In July 2017, The Company signed the final sale agreement for the disposal of a 1.8-hectare plot in the city of Leszno for €810,000. In line with the Company's stated amended restructuring plan, 75% of the net cash proceeds from the disposal will be distributed to Plaza's bondholders.

Sale of plots in Timisoara and Constanta, Romania:

On 7 August, 2017 the Company completed the disposal of a plot totalling approximately 32,000 sqm in Timisoara, Romania, for €7.25 million, which is in line with its book value.

The Company also announced that it completed the sale of a plot totalling approximately 30,000 sqm in Constanta, Romania, for €1.3 million, which is in line with book value. In line with the Company's stated amended restructuring plan, 75% of the net cash proceeds from both disposals will be distributed to Plaza's bondholders.

Extension of long stop date regarding disposal of Piraeus plot in Greece

On 19 September Plaza announced that, further to the announcements on 6 December 2016 and 21 December 2016 regarding the disposal of a plot in Piraeus, Greece, an amendment to the agreement has been signed in which new long stop date of 29 September 2017 was agreed for the conclusion of the transaction. A €145,000 increase in the price of the development plot was also agreed, bringing the value of the asset to €3.545 million. In order to secure the prolonged validity of the initial agreement, the purchaser paid a €140,000 non-refundable extension fee to Plaza and has an option to extend the long stop date to 20 October 2017 for an additional €30,000.

Standard & Poor’s credit rating update

On September 28 Standard & Poor's Maalot (“Maalot”), the Israeli credit rating agency which is a division of International Standard & Poor’s, has reduced its credit rating of Plaza’s two series of Notes traded on Tel Aviv Stock Exchange from “ilCCC” to “ilCC” with negative outlook on a local Israeli scale.

Commenting on the results, acting CEO Dori Keren said:

“We have been making significant progress with our asset disposal programme. leading to a substantially repositioned portfolio and a further deleveraged business.

“Looking ahead, we have more disposals agreed. We remain committed to continuing the strong progress to date, delivering for our stakeholders.”

For further details, please contact:

Plaza

Dori Keren, acting CEO

+ 48 22 231 99 00

FTI Consulting

Dido Laurimore / Claire Turvey / Tom Gough

+44 (0)20 3727 1000

Notes to Editors

Plaza Centers N.V. (www.plazacenters.com) is an emerging markets developer of shopping and entertainment centres. The Company 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. Plaza Centers N.V. is an indirect subsidiary of Elbit Imaging Ltd. (“EI”), an Israeli public company whose shares are traded on both the Tel Aviv Stock Exchange in Israel and on the NASDAQ Global Market in the United States. Plaza Centers has been active in real estate development in emerging markets for over 21 years.

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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