Plaza Centers N.V. announces that, in conjunction with MKB Bank, it has acquired a further 27% stake in its Dream Island project in Budapest, Hungary, from CP Holdings Ltd, a company controlled by Sir Bernard Schreier.
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Budapest, capital city of Hungary.
Plaza and its 50:50 joint venture partner MKB Bank, a leading Hungarian commercial bank which is a subsidiary of the German Bayerische Landesbank, together previously held 60% in the project and have acquired the additional 27% stake for circa 21.4 million. The consideration will consist of a cash payment of 12 million and the assumption of 9.4 million of debt, representing 27% of the project's net debt liability. The consortium now comprises the 87% holding of Plaza and MKB Bank, 10% held by a company controlled by the managing director of the consortium and a further 3% owned by another party and small minorities.
Totaling over 350,000 m² of gross built area, Dream Island will include approximately 3,000 hotel rooms in several hotels of different categories as well as approximately 1,000 leisure apartments, a convention center accommodating 3,500 delegates, a 1,500-seat opera house, a 3,500-seat multipurpose theater, a marina with an anchorage for 300 vessels, a shopping and entertainment center including a prestigious 'Designer avenue', a Roman cultural museum, and parking facilities for approximately 5,500 vehicles, as well as a 40,000-m² casino. It is located at the southern end of Obuda Island on the Danube River in central Budapest.
As announced to shareholders on 27 May 2008, an exclusive casino licence has been granted to Plaza and its Consortium partners for 20 years from the date of opening of the casino, with a ten year extension option, during which time no further major casino licences will be granted by the Hungarian government in the area of Budapest. The casino will have over 200 gaming tables and over 4,000 slot machines, and is expected to be the largest and most prestigious destination of its kind in Europe, where currently no other resort and leisure facility of this magnitude exists.
Ran Shtarkman, CEO of Plaza Centers, said: "Plaza is uniquely placed to take advantage of opportunities in the current market, given its strong balance sheet and its expertise in developing assets across central and eastern Europe. We therefore saw this as a good opportunity, as CP Holdings were looking to restructure their investment portfolio, to acquire a further stake in one of the most important and high profile developments in Europe. In conjunction with our joint venture partners, MKB Bank, this acquisition shows our ongoing commitment to this exciting project. With excavation well underway on site, the detailed planning and design process continues, with phases of completion staggered between 2012 and 2014."
Source: FD
