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Elbit Imaging Reaches An Understanding Regarding A Proposed Debt Restructuring

Stocks in this article: EMITF

TEL AVIV, Israel, February 27, 2013 /PRNewswire/ --

Elbit Imaging Ltd. (the "Company") (TASE, NASDAQ: EMITF) announced today that it has reached a non-binding summary of terms with two of its major noteholders with respect to a proposed restructuring of the debt of the Company (the " Restructuring").

The summary of terms was reached among the Company, York Capital Management Global Advisors, LLC (" York") and Davidson Kempner Capital Management LLC (" DK", and collectively with York, the " Funds"). Funds and/or accounts managed by York and its respective affiliates hold, in the aggregate, approximately 20% and funds and/or accounts managed by DK and its respective affiliates hold, in the aggregate, approximately 15%, respectively, of the outstanding balance of the Notes (as defined below).

The parties to the summary of terms expressed their belief that the Restructuring is in the best interest of the Company and its creditors in order for the Company to maximize and unlock the true value of its assets.

The Restructuring

Pursuant to an arrangement under Sections 350-351 of the Israeli Companies Law, the outstanding balance under the Company's Series 1 and Series A to Series G notes (collectively, the " Notes") and any other unsecured loans of the Company (which together, as of February 26, 2013, equaled approximately NIS 2,464 million (approximately $660 million) would be converted into (a) Ordinary Shares, representing immediately following such conversion 86% of the total share capital of the Company on a fully diluted basis (excluding any new warrants to purchase Ordinary Shares that may be issued to Mordechay Zisser in consideration for Mr. Zisser's continued role in the Company going forward, as described below) and (b) new notes (the " New Notes") with an aggregate face amount of NIS 300 million (approximately $80 million) bearing interest at the rate of 8% per annum  payable on a semi-annual basis, with principal repayable in a single payment at the end of five years.  The Ordinary Shares and New Notes to be issued would be allocated among the various series of the Notes in proportion to the outstanding balance (pari) under each such series and would be listed for trading on both the Tel Aviv Stock Exchange and the NASDAQ Global Select Market free of any restrictions or limitations on trade.  The New Notes would be secured by a negative pledge and would include mandatory prepayment provisions in the event the Company secures corporate-level financing (using only the proceeds of such new financing), and may be prepaid at any time without penalty.


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