BUENOS AIRES, Argentina,
Nov. 24, 2015 /PRNewswire/
-- IRSA Inversiones y Representaciones S.A. (NYSE: IRS;
MERVAL: IRSA), the leading real estate company in Argentina, today issued a statement to
complement the information sent to the market on November 20, 2015.
The Company affirms the accuracy of (i) its consolidated
financial statements as of and for its fiscal year ended
June 30, 2015 which were audited by
Price Waterhouse & Co S.R.L. and (ii) its unaudited
consolidated financial statements as of and for the three-month
period ended September 30, 2015.
IRSA's audited annual and unaudited quarterly consolidated
financial statements were prepared in accordance with IFRS.
For the reasons summarized below, and in accordance with IFRS,
IRSA did not consolidate IDBD in such financial statements.
At both June 30 and September 30, 2015, IRSA had an indirect 49%
interest in IDBD. On June 30, 2015
and September 30, 2015, IFISA held an
interest of 37.39% and 36.76%, respectively, in Cresud, which on
both dates held a 64.3% interest in IRSA. Additionally, IFISA held
an interest of 17.7% in IDBD on both dates. At both June 30 and September 30,
2015, IRSA, IFISA and Mr. Mordechai
Ben-Moshe ("MBM") were parties to a joint control agreement
(the "Joint Control Agreement") with respect to their respective
investments in IDBD. Therefore, IRSA did not have effective control
over IBDB on either of such dates. For this reason, and in
accordance with IFRS, IRSA did not consolidate IDBD in its annual
or most recent unaudited quarterly consolidated financial
statements.
On October 11, 2015, IFISA (not
IRSA) acquired shares representing an additional 14% of IDBD, and
on such date the Joint Control Agreement was terminated. Due to the
October 11 termination of the Joint
Control Agreement, IRSA is currently assessing whether or not it
should begin to consolidate IBDB commencing on the date as of which
the Elsztain group (i.e., IFISA, IRSA and related companies)
obtained effective control over IDBD. No conclusion has been
reached yet.
On October 9, 2015, IRSA filed
with the SEC a request for a waiver of the provisions of Rule 3-09
of Regulation S-X which would require IRSA to include in its annual
report on Form 20-F the separate financial statements of IDBD as of
and for the year ended December 31,
2014 audited in accordance with US GAAS. IRSA filed this
waiver request because IDBD does not have US GAAS financial
statements, and IRSA believes that their preparation would take
time and would impose an undue economic burden on IRSA. This issue
is unrelated to IRSA's consolidation analysis. IRSA has no reason
to believe that the SEC is conducting any kind of investigation
with respect to IRSA's financial statements or otherwise.
It should be noted that IDBD's audited consolidated financial
statements for the year ended December 31,
2014 and its unaudited consolidated financial statements as
of and for the six-month period ended June
30, 2015 were prepared in accordance with IFRS, audited
under Israel GAAS by KPMG, and are publicly available on IDBD's
website.
All of IDBD's Debt is Non-Recourse to IRSA.
Irrespective of whether IRSA consolidates IDBD's indebtedness in
its future financial statements, none of such indebtedness is
guaranteed by IRSA or secured by any of IRSA's assets. All of
IDBD's indebtedness is non-recourse to IRSA.
IRSA Has Complied with its Debt Covenants.
IRSA's outstanding indebtedness includes its local bonds, its
US$150 million Notes due 2017 and its
US$150 million Notes due 2020. IRSA's
debt instruments contain certain incurrence (not maintenance)
covenants that limit the incurrence of indebtedness. IRSA has
carefully reviewed all its debt agreements and believes that it is
in compliance with all applicable covenants and, assuming no
increase in IRSA's shareholding in IDBD, will remain in compliance
even if it consolidates IDBD in its future financial
statements.
Investor Relations Department
IRSA Inversiones y Representaciones S.A.
+ 5411 4323-7449
ir@irsa.com.ar
www.irsa.com.ar
Follow us on Twitter @irsair
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SOURCE IRSA Inversiones y Representaciones S.A.