TEL Aviv, Israel, October 3, 2011, Elbit Imaging Ltd. (NASDAQ: EMITF) ("EI" or the "Company") today announced that its 76% holding subsidiary, S.C. Bucuresti Turism S.A ("BUTU") has consummated a refinancing of its five star Radisson Blu Hotel located in Bucharest, Romania.
According to the Facilities Agreement, a leading international European bank ("Lender"), has granted BUTU a loan of up to Euro 71.5 million (the "Loan"). The Loan shall be drawn down in two tranches, with Tranche A in the amount of approximately Euro 62.5 million having been drawn down on September 29, and Tranche B in the amount of approximately Euro 9.0 million to be drawn down between December 31, 2012 and March 31, 2013, subject to the satisfaction of certain conditions as stipulated in the Facilities Agreement.
The Loan bears interest at the rate of 3 months Euribor rate (to be hedged from March 2013) plus a margin of 4.6% per annum. According to the facility agreement, approximately 17% of the principal will be paid during the term of the Loan in quarterly installments with the remainder to be repaid as a bullet repayment at the end of the term. The final maturity date of the Loan is June 30, 2016.
The proceeds of the Loan shall be used, inter alia, to repay BUTU's current outstanding bank facility and to repay to the Company its shareholder loans in the amount of approximately Euro 25.0 million.
The Loan will be secured by, inter alia, a first-ranking mortgage over the Radisson Blu Hotel, Bucharest and the Centreville Apart Hotel, and other commercial areas within such hospitality complex (the "Mortgage"), and a corporate guarantee which was issued by the Company and by which the Company had guaranteed (i) the annual debt service payments of BUTU (including interest, but excluding the final bullet repayment due on the final maturity date accounting for approximately 83% of the Loan); (ii) the principal amounts required to be prepaid by BUTU in order for it to meet certain financial covenants during the term of the Loan to the extent such financial covenants are not satisfied; and (iii), the obligations of BUTU towards the Lender solely in the event that the Lender is unable to exercise its rights under the Mortgage due invalidity or other defects in respect of the Mortgage as set forth in the guarantee.