The link: http://www.globes.co.il/serveen/globes/docview.asp?did=1000585256&fid=1124
An accounting gain of NIS 385 million for the closing of the acquisition of EDT Retail Trust (ASX: EDT) in June secured a good second quarter financial report for the company.
30 August 10 17:58, Avi Shauly
An accounting gain of NIS 385 million for the closing of the acquisition of EDT Retail Trust (ASX: EDT) in June secured a good second quarter financial report for Elbit Imaging Ltd. (Nasdaq: EMITF; TASE: EMIT). Elbit Imaging acquired 48% of EDT, which owns 78 properties in the US, for $120 million. The accounting profit was for the difference in fair value of EDT's properties and the purchase price of the company.
Without the gain, Elbit Imaging would have posted a heavy net loss for the second quarter. Instead, it posted a net profit attributable to equity shareholders of NIS 216 million, compared with a net loss attributable to equity shareholders of NIS 207 million for the corresponding quarter of 2009.
EDT's financial troubles resulted in its inability to service its debt. On the verge of insolvency, Elbit Imaging took it over.
Elbit Imaging co-CEO Dudi Machluf said, "We acquired EDT at a bargain, reflecting half its shareholders equity, due to its financial condition and problematic debt structure before the takeover, and before the injection of the proceeds of the rights offering into the company."
Machluf added, "The capital injection and in coordination with the financing parties, we fully repaid the debt that burdened the company, thereby improving its secured debt structure in assets by extending the loans due to mature."
"Globes": The US is in recession. What are you looking for there?
Machluf: "The crisis isn't over, but the US has not vanished from the global economic map, and there will be demand for high-quality assets in the future. We see the tip of properties for which the created takeover opportunities and to solve their financial dilemma."
Elbit Imaging's share price fell 2.6% on the TASE today to NIS 49.70, and fell 3.3% in early trading on Nasdaq to $13, giving a market cap of $331 million.
Published by Globes [online], Israel business news - www.globes-online.com - on August 30, 2010
Copyright of Globes Publisher Itonut (1983) Ltd. 2010
EDT Price at posting:
5.8¢ Sentiment: Buy Disclosure: Held
