Under the agreement, the 19 operational shopping and entertainment centers will be transferred to a joint venture of the two parties, and Heitman will acquire a 90% stake by assuming 90% of the outstanding bank liabilities and making an additional cash payment of $154 million. A second stage of the agreement will see nine additional centers in varying stages of development transferred to the joint venture at additional cash cost to Heitman of approximately $63 million.
As security for the attainment of the performance targets of the operational centers, Plaza Centers is providing Heitman with a bank guarantee in the amount of $6 million for a period not to exceed five years. As per the agreement, Plaza Centers will continue to manage the shopping and entertainment centers under the "Plaza Centers" brand name and will render management, leasing and development services, all in consideration for fees customary in agreements of this type.
Plaza Centers chairman Mordechay Zisser says the joint venture with Heitman "is the best acknowledgement of the successful implementation of the first part of our strategic plan, namely to become the leading developer and operator of shopping and entertainment centers in the Central and Eastern European region." The second part, says Zisser, "is to make the Plaza Centers Group the top performing developer and operator of shopping malls in the whole of Europe."
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