Plaza Centers sells Serbian mall to repay creditors

CEE and emerging markets property developer Plaza Centers has completed the disposal of its shopping and entertainment centre, Kragujevac Plaza in Serbia for €38.6 mln, in line with the asset's last reported book value.

Following the repayment of related bank debt of €28.2 mln, the company will receive net cash from the disposal of €10.4 mln.

Around 75% of the net cash proceeds will be distributed to the company's bondholders in the fourth quarter of this year as an early repayment of the bonds, in line with the company's stated restructuring plan.

The shopping centre, which is 99% leased, was opened in March 2012.

'We are very proud of what we have achieved with Kragujevac Plaza, which was the first western shopping and entertainment centre to be completed in Serbia outside the capital Belgrade,' commented Ran Shtarkman, President and CEO of Plaza Centers. 'Its sale is in line with our current strategy to realise value from assets that are close to full potential, in order to reduce debt and recycle our capital for new developments.'

Amsterdam-registered Plaza Centers, which was granted creditor protection by a local court in November last year, recently asked creditors to defer all principal payments of non-collateral backed debts for a total of €182 mln for three years, from 2013, 2014 and 2015 to 2016, 2017 and 2018.

To repay its debt, the company put a number of assets up for sale including its 40,000 m2 Torun Plaza in Poland and the 49,000 m2 Riga Plaza in Latvia.

Major projects for sale include a 35,000 m2 development in Lodz, valued at €83 mln upon completion, and the flagship Belgrade Plaza mixed-use development which includes retail, office, hotel and leisure accommodation and is expected to have a value of €150 mln upon final completion in 2016.

In Romania, the company is building Casa Radio Shopping Center, a 76,000 m2 mall in Bucharest, and another scheme in Timisoara offering 36,000 m2 of retail space.