Anshei Ha'ir: When Do Permits Actually Turn Into Cash?
The main article already showed that permit momentum at Anshei Ha'ir is real. This follow-up argues that shareholder value starts only when a permit turns into project financing, presales, faster buyer collections, and real surplus release, not just another layer of obligations.
The main article already established that Anshei Ha'ir's planning backlog is moving. This follow-up does not go back through the full project list. It isolates the question that determines shareholder value from here: when does a building permit stop being a planning headline and start becoming cash that the balance sheet can actually feel.
The 2025 answer is that it is still early. By year-end the company had more permits, more inventory, more financing lines, and more cash on hand, but the increase in cash did not come from projects funding themselves. It came first from financing. At the April 6 close, the stock traded at 308.5 agorot, implying roughly NIS 155 million of equity value, with only NIS 25.5 thousand of daily turnover. In a stock this illiquid, the market will not count a permit twice. It will need proof that the permit is reducing debt, releasing surplus, and shortening the path to cash.
This is where the right frame is all-in cash flexibility, not normalized cash generation. The issue here is not what the company could produce if it stopped developing projects. The issue is whether the permit stage has already created real financing flexibility.
In 2025 Cash Rose, But Permits Still Did Not Pay The Bill
On a first read, the cash line looks better. Cash and cash equivalents rose to NIS 51.8 million from NIS 15.3 million. But the right bridge shows what actually happened: operating activity burned NIS 73.5 million, investing activity burned another NIS 10.2 million, and only financing activity brought in NIS 120.2 million. This was not a harvest year. It was a bridge year.
The analytical implication is sharp. When cash rises only because financing came in faster than operating burn, a building permit still has not become free cash. It has first become the ability to draw financing lines, raise debt, and keep the project moving. The company says this directly. In the financing section it states that it is working on an ongoing basis to raise credit or bonds, and expects to do the same over the next 12 months. That matters, because it means the move from permit stage to financing stage has still not created a system that funds itself.
The same point shows up in the funding stack. At year-end 2025 the company still carried NIS 40.1 million of project-account credit, NIS 71.6 million of long-term loans from banks and other lenders, NIS 20.5 million of long-term shareholder loans, and NIS 121.3 million of bonds including current maturities. Permits are bringing projects closer to execution, but they still sit on top of a heavy financing layer.
Working Capital Is Positive, But Most Of It Is Not Liquid
At headline level, working capital looks comfortable. Current assets rose to NIS 406.7 million against current liabilities of NIS 307.9 million, a reported surplus of NIS 98.7 million. But once the company presents its 12-month adjustments, that surplus falls to only NIS 37.4 million.
More importantly, more than 70% of current assets at year-end sat in inventory of apartments for sale, NIS 294.5 million. Another NIS 36.5 million sat in sales receivables awaiting collection. That is the core point: positive working capital is not the same thing as cash flexibility. A large part of it is locked inside projects that still need execution, sales, collection, and surplus release.
| Main current item | 2025, NIS m | What it really means |
|---|---|---|
| Cash and cash equivalents | 51.8 | Relatively available liquidity |
| Cash in escrow and restricted project accounts | 15.0 | Important cash, but not freely usable |
| Receivables and contract assets from apartment sales | 36.5 | Accounting value that still depends on collection timing |
| Inventory of apartments for sale | 294.5 | The main asset, but not free cash |
The board adds another important layer. Its conclusion that there is no reasonable liquidity concern does not rely only on cash already on hand. It also relies on projected cash flow, restricted cash, existing credit lines, the sales plan, project completion timing in 2026 and 2027, and even the ability to pledge future backlog in order to raise new debt or expand an existing bond series. In other words, even by the company's own framing, the cushion still depends on completing the future financing path, not only on cash that has already been captured.
A Permit First Creates Obligations
This is the point most readers miss when they focus only on headlines. Once a project moves from planning stage to the stage where the company gains control over the land and begins execution, it does not create only an option for future profit. It creates obligations too.
At the end of 2025, obligations to land sellers stood at NIS 158.6 million, up from NIS 62.8 million a year earlier. Of that amount, NIS 135.6 million reflected construction-service obligations, and another NIS 23.0 million reflected rent, moving, and related obligations to tenants. The company also states that about NIS 102.8 million of this balance is expected to be realized only after more than 12 months.
This is the center of the follow-up thesis. A building permit does not turn directly into cash. It first turns into execution obligations, rent support for tenants, financing cost, and equity that still has to be put into the project. That is why the rise in inventory and in obligations to land sellers is a sign of real progress, but not yet a sign that value has become accessible to shareholders.
The Real Sequence Is Permit, Financing, Presale, And Surplus Release
Manna 4 shows the sequence better than any generic description. In February 2026 the project signed a financing agreement with two non-bank lenders. The package includes a project facility of about NIS 53 million, Sale Law guarantee and mortgage-bank guarantee lines of about NIS 83 million, other guarantee lines of about NIS 6.5 million, financial credit of about NIS 16 million, and an equity-completion line of about NIS 2.3 million.
But that agreement does not mean cash opens immediately. Drawdown remains subject to conditions precedent, including equity injection, registration of collateral, a minimum presale threshold, receipt of a building permit, and signing with a shell contractor. The package is also supported by unlimited guarantees from the company, Rothstein, and Anshei Ha'ir. So even after financing is signed, the path to cash still runs through more equity, more sales, and more guarantees.
The same logic appears in the annual report for Yehuda Gur 7 and Epstein 4. The permits received after the balance-sheet date are described as one of the conditions precedent for using financing lines under the relevant project-finance agreements. That is the key distinction: the permit opens the door. It does not put cash in the account.
The shareholder bridge is not gone either. At year-end 2025, long-term shareholder loans still stood at NIS 20.5 million, and the related-party disclosure states that the facilities were extended to July 2027 and that an additional NIS 4.3 million line was added, all subordinated to series A bonds. That means the company still needs bridging capital for the period between permit and project cash generation.
| Stage | What it opens | What is still missing before cash shows up |
|---|---|---|
| Building permit | The move from planning project to financeable and executable project | Financing, equity, contractor, and sales |
| Financing agreement | Credit lines and guarantee capacity | Conditions precedent fulfilled and actual drawdown |
| Presale | A base for the bank and for line utilization | Real collections and payment timing |
| Surplus release | The point where value starts moving upward | Execution, budget discipline, and sales pace |
Buyers Are Also Part Of The Funding Mechanism
This is where the most interesting line between the lines appears. In the financial-risk note, the company explicitly says it reduces interest-rate exposure, among other things, by allowing apartment buyers to accelerate payments. In the executive-transaction section, it goes one step further and explains that company policy is to offer a cash benefit in exchange for early payment in order to reduce credit-line utilization, lower senior-debt cost, and increase the ability to release project surplus.
The CEO example is not important because of its scale. It is important because it exposes the mechanism. In August 2024, a benefit of about NIS 270 thousand was approved for him for accelerating payments on two units he had purchased, calculated by reference to senior-debt interest less the Sale Law guarantee fee. The company also states that the calculation method is the same as for other buyers who accelerate payments. By the report date, the full benefit had been realized, of which about NIS 40 thousand was recognized in 2025.
The message is sharp: at Anshei Ha'ir, a permit does not become cash only through the lender. It also needs the buyer. If buyers do not bring payments forward, senior debt stays in place longer, financing cost remains heavier, and surplus release is delayed. So the relevant economic question is not only whether a permit was received, but whether the permit was received in a project that can also generate presales, financing drawdown, and faster buyer cash.
That matters even more because rate sensitivity is not trivial. The company estimates that a 1% move in rates raises or lowers annual financing cost by about NIS 1.147 million, and its formal sensitivity table shows a 2% move is worth roughly NIS 2.294 million. That explains why management is so focused on accelerating buyer payments and shrinking credit balances. This is not marketing cosmetics. It is part of the financing mechanism itself.
Conclusion
The main article argued that permits are advancing faster than profit. This follow-up sharpens why. A permit becomes cash only after it clears four stations: available financing, fulfilled conditions precedent, presales that bring money rather than only signatures, and surplus release that truly shrinks the financing layer. By the end of 2025 and into early 2026, Anshei Ha'ir had clearly moved forward on the first station, and in some projects also on the second. But at shareholder level, the company is still not at the fourth.
So the right 2026 question is not how many more permits will be added. It is how many of those permits will actually reduce senior debt, reduce dependence on shareholder bridge financing, and show that cash is starting to come from the project itself. In a small and illiquid stock, that is the point where a permit really turns into money.
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