Nochi Dankner is writing down the value of the land for the planned Plaza Hotel and Casino project in Las Vegas. Dankner's partner in the multibillion dollar project is Yitzhak Tshuva. They bought the site for the project in 2007 for $1.24 billion. The main reason for the write-downs is the delay in the start of construction of the project's first stage, which was due to begin in 2010, because of the market climate.
Tshuva and Dankner own the project in equal shares through Elad IDB Las Vegas: Dankner through IDB Holding Corp. Ltd. (TASE:IDBH) unit IDB Group USA Investments Inc. held equally by Discount Investment Corporation (TASE: DISI) and its subsidiary Property and Building Ltd. (TASE: PTBL), and Tshuva through Elad Properties. The 1.5-million square meter Plaza Hotel and Casino will have 3,500 rooms, and a 500,000-square meter residential project.
In a series of notices to the TASE today, Dankner's companies stated that management would recommend to the companies' boards to marke write-downs on the land in the companies' financial reports for 2008.
Property and Building and Discount Investment record the value of the land at NIS 1.4 billion and its expected value under International Financial Reporting Standards (IFRS) is NIS 830 million - a 25% reduction. Property and Building will make a write down of NIS 200 million and Discount Investment will make a write down of NIS 167 million.
The write-downs work their up through the IDB structure. IDB Development Corp. Ltd. (TASE: IDBD) will make a write-down of NIS 324 million, and IDB Holdings will make a write-down of NIS 282 million.
IDB Holdings owns 87% of IDB Development, which owns 74% of Discount Investment, which owns 83.4% of Property and Building.
Elad is a private company, and it is not known at this time whether it will make similar write-downs on its 50% holding in the Plaza Hotel and Casino.
Published by Globes [online], Israel business news - www.globes-online.com - on February 19, 2009
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