Annual report 2010 - plazacenters

O
Br
Mg
Fs
Ai
The net proceeds of the Placement and Entitlement Offer were used for the repayment of the amounts outstanding under EDT’s
unsecured debt and derivative liabilities.
Following the completion of the above transactions, EPN is fully consolidating the financial statements of the Trust with non-controlling
interest of 52.2%, as of June 18 2010.
The June 30, 2010 effective date was modified to June 18, 2010 to adequately reflect the business combination performed.
The following presents the fair value of asset acquired and liabilities assumed (all items are thousands of EUR, and reflects 100% of the
acquired assets and liabilities):
Fair value
Fair value
Item 30.06.10 31.12.10
Cash and cash equivalents 25,224 25,224
Restricted cash 4,065 4,065
Trade and other receivables 30,588 26,929
Investment properties 1,153,104 1,184,651
Deferred tax assets* 4,993 2,605
Other assets 1,473 1,515
Trade payables (3,169) (3,256)
Interest bearing loans* (831,649) (847,261)
Other accounts payable (18,349) (18,844)
Total net asset 366,280* 375,628
* Changes from the June report is due to the updated Purchase Price Allocation reported, which was concluded in the second half of 2010.
** The carrying amount of all assets and liabilities of EDT are identical to its fair value, with the exception of interest bearing loans, for which the carrying amount totaled
EUR 840 million. Deferred tax asset in the amount of EUR 2.5 million was provided in respect of difference.
The total purchase price, in thousands of EUR, as well as fair value of the non-controlling interest was as follows:
Total amount paid by EPN*: 94,343
Fair value of non-controlling interest **: 89,477
Total 183,820
* The total part of the amount paid by the Company was EUR 19.8 million, and after deduction of cash acquired of EUR 5.4 million (Company part) the net cash consideration
totaled EUR 14.4 million. The change in total amount paid by EPN as recorded on June 30, 2010 figure (95,608 TEUR) is due to foreign currency translation of the USD proceeds
to June 18, 2010 rates.
** The Company chose to measure non-controlling interests at fair value. The non-controlling interest was evaluated at AUD 0.051 per unit (according to stock exchange quote
as of June 18, 2010), totaling USD 109 million (circa EUR 89 million). The change comparing to June 2010 report (AUD 0.055 per unit) is to reflect adequately the business
combination date.
As a result of the above, EPN recorded a gain from a bargain purchase of USD 240 million (EUR 192 million), and the Company recorded
21.65% out of this amount, totaling approximately EUR 42 million as other income in the Company consolidated income statement.
Planned liquidation of certain assets in EDT
The Trust’s investment in the MV LLC joint venture entity was equity accounted to nil. The Trust has no obligation to provide further
funding of this portfolio. As a result, the Group no longer recognized further losses from this portfolio from that date as part of the equity
accounted profit or loss from jointly controlled entities and the portfolio no longer contributed to the Group’s Net Tangible Assets (NTA).
Due to the likelihood of not being able to retrieve any equity value from this portfolio and significant additional capital being required,
the Trust, DDR and the loan servicer jointly requested that a court appoint a third party receiver to manage and liquidate the remaining
assets within the portfolio. On August 24, 2010 a third party receiver was appointed over the remaining assets within the MV LLC
portfolio. As a result the Trust no longer has joint control over MV LLC and in accordance with its accounting policies accounted for its
interest in MV LLC at December 31, 2010 as an investment held at the lower of cost and net realizable value which was nil at that date.
Plaza Centers N.V. Annual report 2010121