7th Jul 2016 14:29
LONDON (Alliance News) - Plaza Centers NV on Thursday said a provision for around EUR2.0 million will be made on its accounts, after it was found liable for an indemnification claim upheld by the International Court of Arbitration, in relation to a transaction undertaken with shopping centre owner Klepierre SA in 2004.
Property developer Plaza Centers has, in total, sold 21 of its shopping centers in the CEE region and India, but the Hungarian tax authorities challenged the tax treatment of two of the properties sold in Hungary in 2004, and looked to impose a penalty of around EUR1.4 million on Klepierre.
Klepierre then submitted an indemnification request claiming that the tax would fall into the framework agreement tax indemnification provisions, and Plaza Centers was liable to pay the penalty, which Plaza Centers rejected. As such, Klepierre submitted a claim to the International Court of Arbitration of International Chamber of Commerce in Brussels.
On Thursday, Plaza Centers said the arbiter has ruled that Plaza is liable for an indemnification claim totalling around EUR2.0 million, including costs arising from the legal process. A provision for such amount will be made in Plaza's accounts, the company said.
As Klepierre is deemed a creditor under Plaza Centers restructuring plan, payment of the amount due to Klepierre is deferred until July 2018 and, until that date, Plaza said it will continue to pursue the legal channels available to it in an effort to minimise the basis for the indemnification claim.
Shares in Plaza Centers were down 11% at 277.00 pence on Thursday.
By Hannah Boland; [email protected]; @Hannaheboland
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