Mirland has reported its results for the year ended 31 December 2015. Total assets as at 31 December 2015 decreased by 23.7% to US$577.4 million, as compared to US$756.6 million as of 31 December 2014. Equity as at 31 December 2015 was a negative US$(19.3) million compared to US$141.4 million the preceding year. The Company’s real estate portfolio has been marked down in value by approximately 33% resulting in net leverage increasing substantially to 82.3% of total assets (31 December 2014: 56.9%). Total net borrowings amounted to US$475.7 million (31 December 2014: US$430.1 million).
Mirland has been in negotiation with the trustees of the Series A-F bondholders to agree a restructuring of its debt which addresses the challenges posed by the current instability in the Russian economy for the benefit of all the Company’s creditors and shareholders. On 17 November 2015, Mirland announced that, following preliminary meetings held in Israel on 11 November 2015, a Proposed Restructuring Plan and amended trust deeds to the Bonds (Series A-F) were approved by the Company’s Bondholders (Series A-F). The completion of the Restructuring Plan is subject to certain conditions precedent and these have yet to be satisfied.
On 1 February 2016 the Company held a meeting with the trustees of the Company’s A-F bonds at which certain terms of the Proposed Restructuring Plan were discussed in light of a further sharp decline in the exchange rate of the Russian Rouble against the US Dollar. At this stage no agreement has been reached with the Trustees.
On 15 March 2016 Standard & Poor’s Maalot, a subsidiary of Standard & Poor’s Rating Services, reconfirmed the Company’s D rating on local Israeli scale.
In addition, as a result of the negative economic conditions, the Company is behind on its payment of US$0.5 million out of a total of US$1.5 million which is due to one of its banks which provides financing to one of its shopping centres. The total loan amount provided by banks against the Company’s subsidiaries’ yielding assets is US$240 million. Currently, the Company is negotiating with its banks in order to restructure the loans provided to the Company’s subsidiaries. Due to the continued negotiations with the Bondholders and the financing banks in Russia and until a final agreement is reached with them, the Group may defer principal payments to the financing banks in Russia.
Revenue for the year was flat at US$86.3 million – the revenue from investment properties fell by 38% to US$35.1 million (31 December 2014: US$56.5 million), mainly due to depreciation in the Russian Rouble against the US Dollar and due to negative movement in the Russian real estate market. of approximately 29.5%.
MLD : Mirland still renegotiating its debt