| NOTE 19 - | DISCONTINUED OPERATIONS |
Sale of the “Radisson complex”
On November 29, 2017, the Company has announced, that its wholly owned indirect subsidiary (the “Vendor”) has signed a definitive sale and purchase agreement (the “Agreement”) for the sale of its entire shareholding (comprising approx. 98.2% of the outstanding share capital) in the company (the “SPV”) which owns the Radisson Hotel Complex in Bucharest, Romania, based on a property value of €169.2 million (the “Transaction”). The Agreement has been signed with an acquisition vehicle jointly owned by two international investment funds (the “Purchaser”).
The net proceeds that was derived from the Transaction (after offsetting the SPV’s senior bank loan, working capital and other adjustments, as well as transaction expenses) was approximately €81 million. Part of the net proceeds equal to €8 million was used to finance a vendor loan which has been granted for a period of 3 years, bearing interest at the rate of 5% per annum (the “Vendor Loan”).
The Vendor Loan acts as collateral for customary post-closing liabilities of the SPV, whereby the Purchaser may offset adjudicated losses which may be incurred by it as a result of a breach of warranties or in respect of certain indemnities given by the Vendor in terms of the Agreement. Additionally, the Company has granted a letter of guarantee in favor of the Purchaser pursuant to which it has undertaken to fulfill the Vendor’s undertakings and obligations under the Agreement (if and to the extent that the Vendor fails to do so).
On December 18, 2017 the Company has completed the transaction. Part of the Net Proceeds were applied in order to repay the Company outstanding loan to Bank Hapoalim Ltd. in the amount of approximately Euro 11.6 million and NIS 240 million were applied to an early repayment of interest and principal to the Company (series H) noteholders
Following the Closing and consummation of the transaction, the Company has ceased to operate the “Radisson Complex” hotel activity, and accordingly the said activity was classified as discontinued operation including comparative information.
Sale of Elbit Fashion
On January 5, 2015 Elbit Fashion has completed the sale of the operation and business of “Mango” retail stores in Israel from Elbit Fashion to Fox- Wiesel Ltd (the “Closing”) for consideration of approximately NIS 37.7 million. Following the Closing and consummation of the transaction, Elbit Fashion has ceased to operate the “Mango” retail stores activity, and accordingly the said activity was classified as discontinued operation.
Results of discontinued operations:
| Year ended December 31, |
|||||||||||||
| 2017 | 2016 | 2015 | |||||||||||
|
NIS in thousands (except for per-share data) |
|||||||||||||
| Revenues from hotel operations and management | 130,142 | 135,839 | 147,886 | ||||||||||
| Revenues from fashion merchandise | - | - | 1,857 | ||||||||||
| 130,142 | 135,839 | 149,743 | |||||||||||
| Expenses and losses | |||||||||||||
| Cost of fashion merchandise | - | - | 4,123 | ||||||||||
| Cost of hotel operations and management | 105,678 | 115,367 | 126,849 | ||||||||||
| Financial expenses | 20,103 | 19,634 | 31,444 | ||||||||||
| Other income, net | (669 | ) | (6,961 | ) | (70,133 | ) | |||||||
| (125,112 | ) | (128,040 | ) | (92,283 | ) | ||||||||
| Profit (loss) from discontinued operations before income taxes | (5,030 | ) | 7,799 | 57,460 | |||||||||
| Income tax (income) expenses | 80 | (114 | ) | 1,229 | |||||||||
| Profit (loss) from discontinued operations | (5,110 | ) | 7,913 | 56,231 | |||||||||
| Gain from sale of hotels | (55,835 | ) | - | - | |||||||||
| Release of capital funds as a result of the sale of hotels | 213,848 | - | - | ||||||||||
| Total Profit from discontinued operations | 152,903 | 7,913 | 56,231 | ||||||||||
| Basic and diluted earnings per share | (16.64 | ) | 0.85 | 6.11 | |||||||||
Reclassification of comparative information:
| As previously reported | Amendment | As presented in these financial statements | ||||||||||
| NIS in thousands | ||||||||||||
| Revenues | ||||||||||||
| Revenues from sale of commercial centers | 200,078 | - | 200,078 | |||||||||
| Revenues from Hotels operations and management | 147,886 | (147,886 | ) | - | ||||||||
| Total revenues | 347,964 | (147,886 | ) | 200,078 | ||||||||
| Gains and other | ||||||||||||
| Rental income from commercial centers | 83,849 | - | 83,849 | |||||||||
| Gain from sale of investees | 6,712 | - | 6,712 | |||||||||
| Total gains | 90,561 | - | 90,561 | |||||||||
| Total revenues and gains | 438,525 | 290,639 | ||||||||||
| Expenses and losses | ||||||||||||
| Cost of commercial centers | 290,360 | - | 290,360 | |||||||||
| Hotels operations and management | 126,849 | (126,849 | ) | - | ||||||||
| General and administrative expenses | 16,678 | - | 16,678 | |||||||||
| Share in losses of associates, net | 42,925 | - | 42,925 | |||||||||
| Financial expenses | 236,288 | (28,567 | ) | 207,721 | ||||||||
| Financial income | (2,154 | ) | - | (2,154 | ) | |||||||
| Change in fair value of financial instruments measured at fair value through profit and loss | 5,446 | (2,878 | ) | 2,568 | ||||||||
| Write-down, charges and other expenses, net | 38,298 | 60,994 | 99,292 | |||||||||
| 754,690 | (97,300 | ) | 657,390 | |||||||||
| Loss before income taxes | (316,165 | ) | (50,586 | ) | (366,751 | ) | ||||||
| Income taxes expenses (tax benefits) | 5,631 | (1,229 | ) | 4,402 | ||||||||
| Loss from continuing operations | (321,796 | ) | (49,357 | ) | (371,153 | ) | ||||||
| Profit from discontinued operations, net | 6,874 | 49,357 | 56,231 | |||||||||
| Loss for the year | (314,922 | ) | - | (314,922 | ) | |||||||
| Attributable to: | ||||||||||||
| Equity holders of the Company | (186,150 | ) | - | (186,150 | ) | |||||||
| Non-controlling interest | (128,772 | ) | - | (128,772 | ) | |||||||
| (314,922 | ) | - | (314,922 | ) | ||||||||
| Loss from continuing operations | ||||||||||||
| Equity holders of the Company | (193,024 | ) | (49,685 | ) | (242,709 | ) | ||||||
| Non-controlling interest | (128,772 | ) | 309 | (128,463 | ) | |||||||
| (321,796 | ) | (49,376 | ) | (371,172 | ) | |||||||
| Profit from discontinued operation, net | ||||||||||||
| Equity holders of the Company | 6,874 | 49,666 | 56,540 | |||||||||
| Non-controlling interest | - | (309 | ) | (309 | ) | |||||||
| 6,874 | 49,357 | 56,231 | ||||||||||
Statement of Cash flows
The statement of cash flows includes the following amounts relating to discontinued operations, the majority of which as of December 2015, are attributable to the discontinued fashion apparel and hotels operations:
| Year ended December 31, |
|||||||||||||
| 2017 | 2016 | 2015 | |||||||||||
|
NIS in thousands |
|||||||||||||
| Operating activities | 49,142 | 26,443 | (5,921 | ) | |||||||||
| Other investment activities | 297,875 | 14,082 | 216,957 | ||||||||||
| Other financing activities | (157,948 | ) | 118,556 | (189,203 | ) | ||||||||
| Net cash provided by (used in) discontinued operations | 189,069 | 159,081 | (21,833 | ) | |||||||||