Global Knafaim: How much of the cash pile is really free after reserves, maintenance, and balloons

The main article already established that Global Knafaim entered 2026 with a much lighter balance sheet and a much larger cash pile after the Delta aircraft disposals. This follow-up does not return to the broader company story. It isolates one narrower question: how much of that cash pile is actually free, once lessee reserves, maintenance-linked liabilities, and the balloon structure are taken seriously.

This is a case for an all-in cash-flexibility lens rather than a normalized cash-generation lens. The relevant issue is not how much recurring profit the leasing platform can show before strategic uses of cash. The relevant issue is how much real flexibility remains after actual commitments, after liabilities attached to the fleet, and after a debt schedule that still assumes refinancing, re-leasing, or asset sales.

The headline number is real. At year-end 2025 the company had $12.377 million of cash and cash equivalents, $18.81 million of current bank deposits, and another $10 million of non-current bank deposits, or $41.187 million in total. But that number alone is incomplete. At the same date, it also carried $14.12 million of lessee-deposit liabilities, $5.011 million of current bank and bond maturities, and a maintenance and financing layer that became more demanding again once the 737 transaction closed in February 2026.

The 2025 Cash Bridge: The Pile Grew, But Mainly Through Monetizations

The 2025 change in cash was not built by a lease engine that suddenly started flooding the business with operating cash. Cash and cash equivalents rose from $4.941 million to $12.377 million, but the bridge to that year-end figure ran mainly through asset monetizations.

Operating activity contributed only $4.315 million in 2025. Investing activity contributed $34.649 million, driven mainly by $68.346 million from the sale of the two Delta A220-100 aircraft, $2.159 million from monetizing the residual TUS investment and shareholder loans, and $1.066 million from the partial Sde Dov real-estate sale. Offsetting that, the company spent $18.112 million on aircraft purchases and fleet investment and moved $18.81 million into bank deposits.

The financing side tells the same story. $31.528 million was used in financing activity after early repayment of the Delta aircraft loans, regular loan and bond amortization, and the receipt of $12.8 million of financing for the A320. That is not a flaw. It simply means that the year-end cash position was built mainly through fleet rotation and deleveraging, not through a sudden step-up in recurring lease cash flow.

In other words, the liquidity improvement is real, but it needs to be read correctly. The company sold long-duration aircraft, removed debt, and parked part of the proceeds in deposits. That is very different from a self-funding portfolio where signed lease income alone is already covering debt service and the next equity check.

What Sits In The Headline, And What Is No Longer Truly Free

The most important point in this follow-up is that Global Knafaim’s cash is not just an asset line. It is also a transition pool. The filing itself makes clear that lessee deposits are assets of the company, but that matching liabilities stand against them depending on the deposit type. That is exactly the difference between reported liquidity and free corporate cash.

This is not an IFRS measure of free cash. It is a stricter look-through haircut that answers a simpler question: how much remains after stripping out only the layers that the filing itself already identifies as obligations to lessees or lenders. Even on that basis, $22.056 million remains before non-current debt, before equity needed for new deals, and before future maintenance events. That is the point. The cash pile is far better than it was, but it is not a clean surplus pile.

The jump in lessee deposits makes that clear. At year-end 2024 gross lessee deposits stood at only $3.434 million. By year-end 2025 they had risen to $14.12 million, including $12.863 million of future-maintenance reserves and $1.257 million of lease-security deposits. Of that amount, $6.165 million had already been moved into the current portion. So a meaningful part of the cash that came into the structure arrived together with an obligation that will move back out once maintenance is performed or lease terms require repayment.

The non-cash appendix closes the loop. It shows $10.693 million of aircraft acquisitions against lessee deposits. That is the economic heart of the A320 transaction: the fleet improved, but part of the purchase price was not paid in fresh cash because the company also stepped into the seller’s maintenance-reserve and deposit obligations. So if the reader focuses only on the cash headline and ignores the liability side, it becomes easy to label part of that money as excess when it already has an economic destination.

The 737 Adds More Than An Aircraft. It Adds A New Obligation Layer

The 737 closing on February 10, 2026 is where the gap between the cash headline and real flexibility becomes even more tangible. Total purchase cost including transaction expenses was about $25 million gross. Net payment at closing was about $15.2 million, of which $10 million was bank-funded and the balance came from the company’s own resources. But that is only part of the picture.

Together with the aircraft, the company also stepped into roughly $8.4 million of existing lessee maintenance reserves and roughly $0.8 million of lessee security deposit. It also has a $6 million credit facility tied to the transaction. At the same time, the lessee is required to keep paying monthly maintenance reserves, but when major maintenance events occur the company will need to return the accumulated balances, and the filing also states that the company may have to participate in overhaul costs in aggregate by up to about $5 million, even though the final scale cannot yet be estimated.

That is a critical number, because it means the 737 is not just a new leased asset with about $8.5 million of expected lease receipts through the end of 2029. It is also a transaction that brings in existing reserves while simultaneously loading the structure with a repayment and maintenance-participation layer. In other words, part of the cash that comes with the deal does not widen shareholder margin of safety dollar for dollar.

The funding layer becomes less clean as well. As of December 31, 2025 the entire credit book was fixed-rate. After the 737 financing, the company says only about 77% of the credit book remains fixed-rate. That means part of the debt stack has now moved to SOFR-based financing, while the year-end balance sheet still shows a calmer snapshot. This is not just an accounting detail. It means lower visibility on financing cost than the December balance-sheet date alone suggests.

Signed Lease Receipts Still Do Not Self-Fund The Balloon Structure

The company says it does not expect to need additional sources over the coming year to cover ongoing activity with the current fleet and operating format. That view is understandable. It has a larger cash pile, positive working capital of about $21.1 million, another $10 million of non-current bank deposits outside working capital, unpledged assets, and unused credit facilities of $6.2 million on the A320 and $6 million on the 737.

But the company’s own lease-receipts-versus-debt-service table clarifies where that comfort actually comes from.

Across the four periods from 4/26 to 3/30, the company shows $21.378 million of contracted lease receipts. Against that sit $16.813 million of regular principal repayments and $5.879 million of interest, or $22.692 million in total. That means even before balloons, the cumulative position is negative by $1.314 million. On top of that sit another $26.293 million of balloon repayments.

That does not mean the company is facing an immediate crisis. It means the signed contracts do not fund the portfolio on their own. To get through the balloons, the structure still needs refinancing, aircraft sales, re-leasing, or use of the existing cash cushion. That is also exactly how management frames it when it says balloon repayments could be handled through new financing or through aircraft sales if needed.

There is one more important detail. The same table explicitly says it does not include the effect of drawing the existing credit lines. So if the company ends up drawing the A320’s $6.2 million facility or the 737’s $6 million facility to fund maintenance events, the future debt burden will be heavier than the table already shows. In other words, even the disclosed balloon table still does not capture the full possible maintenance-funding layer.

That is why the right way to read the cash pile is not simply $41.2 million of cash and deposits against $33.4 million of gross financial debt. A more honest read is $41.2 million of cash and deposits against $14.12 million of lessee-deposit liabilities, $5.011 million of current financial maturities, $26.293 million of balloons already visible in the table, and the possibility of more debt if the maintenance facilities are actually used.

Bottom Line

The thesis of this follow-up is simpler than the cash headline, and more important than it. Global Knafaim’s cash is real, but only part of it is truly free. The 2025 improvement was built mainly through the Delta monetizations and debt reduction, while the A320 and 737 also brought with them reserves, deposits, and maintenance obligations. At the same time, contracted lease receipts still do not cover even regular debt service across the 4/26 to 3/30 window, let alone the balloon stack.

The intelligent counter-thesis is that an aircraft lessor is not supposed to repay balloons from monthly rent alone. The industry model also relies on residual value, aircraft sales, re-leasing, and refinancing. That is true. But precisely for that reason, the real margin of safety is determined not only by the size of the cash pile, but by how much of that cash actually remains available after reserves, maintenance, and scheduled maturities already sitting on top of it.

That is why the next real test for Global Knafaim is not whether it can show a large cash number, but whether it can use that cash as a real cushion through the fleet transition without watching it erode too quickly once maintenance events and balloons start arriving.