Immediate –Electra Real Estate Ltd. (Hereinafter: The Company) Re: Report
The Company is announcing that the Company's included company (Hereinafter The Included Company) 45% of which is held by the Company and that holds, inter alia, the rights to the residential project and land designated for development in the city of Hyderabad (Hereinafter The Project) signed on 8 January 2016 a transaction with a local partner to sell its rights to the project (100%) in consideration of $34 million (approximately NIS 134 million).
In accordance with the building rights in the project, approximately 2,750 residential units can be built in 14 buildings that occupy a total area of 102 dunam. To date of the transaction, the construction of 4 buildings has been completed (almost full occupancy) and 4 buildings are in various stages of development. (The First Stage)
The Company's share in cash flow that was generated as a result of the sale of the project, after costs for implementing the sales transaction and after income tax, is approximately $13.8 million (approximately NIS 54 million).
By virtue of the agreement, the Included Company completed the sale of the first stage (100%) in consideration for $15 million (approximately NIS 59 million). The free cash flow generated for the company for its share in completion of the sale of the first stage after costs incurred in implementing the sale and after taxes on income is approximately $5.8 million (approximately NIS 23 million).
The sale of land remaining in consideration (100%) in the amount of $19 million (approximately NIS 75 million) will be paid in 6 installments (every 6 months commencing from the end of the year from the date of completion of the first stage, and no later than 31 December 2018). It is hereby clarified that the land will be sold as is an the Company will not develop the land during this period.
Completion of the transaction is not expected to have any material impact on Company results.
The information in this Immediate Report regarding the impact of the transaction on the financial results of the Included Company, future cash flow that will be generated for the Included Company and the timing of completion of the ensuing stages of the transaction, is forward looking information that assumes completion of the engagement with the buyer as specified above and is based on the Company's premises regarding the costs involved in the transaction and liabilities for income tax. This information might not materialize, or might materialize differently than expected, inter alia, if the Company's premises materialize differently than expected.