Sunflower: How Much Cash Is Actually Reachable to Shareholders After the Asset Sales
The main article argued that Sunflower's asset sales cleaned up the balance sheet. This follow-up shows that cash already sitting at the parent has improved materially, but most cash below the parent still moves upward only through DSCR tests, distribution limits, shareholder-loan restrictions, and project-finance gates.
What This Follow-up Is Isolating
The main article argued that Sunflower's asset sales bought time, removed a large part of the debt pressure, and moved the story away from survival and toward the next growth engine. This follow-up isolates the more shareholder-sensitive layer of that argument: not how much cash the group reports on a consolidated basis, but how much of it already sits at the parent, and how much still remains behind financing rings, coverage tests, and distribution restrictions.
This is not a normalized cash-generation exercise. The framing here is cash reachability to shareholders. That is why the starting point is not the consolidated cash balance of NIS 138.7 million, but the parent-only solo balance sheet: NIS 109.3 million of cash, cash equivalents, and short-term investments at year-end 2025. From there, the right way to read the situation is to add what has already happened after the balance-sheet date, mainly the remaining Prime payment and another solo debt prepayment, and then separate cash that has already made it to the parent from cash that is still subject to lender tests below it.
The answer is already fairly sharp. The positive side: the parent layer is much stronger than it was a year ago, and solo debt has been reduced to a very small number. The less comfortable side: the annual report explicitly says that project-finance restrictions apply not only to dividends, but also to shareholder-loan repayments and excess-cash transfers. In other words, value created below the parent still does not automatically become shareholder-reachable cash above it.
This chart is intentionally a mechanical bridge, not an official interim cash balance. It simply reflects what the filings say already happened after 31 December 2025, before any other ordinary uses not separately disclosed.
What Is Already Sitting at the Parent
The first number to remember is NIS 109.3 million. That is the parent's solo cash, cash equivalents, and short-term investments at 31 December 2025. The second number is the gap versus the consolidated figure. On a consolidated basis, cash and equivalents stood at NIS 138.7 million. That means roughly NIS 29.4 million of the reported cash was not sitting at the parent at year-end. That gap matters because it almost matches the remaining Prime consideration, NIS 29 million, that was actually paid on 23 February 2026. In other words, a large part of the trapped-cash debate moved one floor upward after the balance-sheet date: the Prime cash did make it up.
The liability side at the parent also looks materially cleaner. At year-end 2025 the solo balance sheet still carried about NIS 21.7 million of bank debt, of which NIS 3.7 million was current and NIS 18.0 million was long-term. In addition, the parent carried about NIS 11.3 million of a loan from an investee and about NIS 3.1 million of lease liabilities. That is no longer a stressed parent structure, but it is also not a situation where it makes sense to treat the entire NIS 109.3 million as if it were fully distributable tomorrow morning with no claims beneath it.
After the balance-sheet date the company prepaid another roughly NIS 17 million of solo debt, so by the report date the remaining solo bank debt had fallen to roughly NIS 5 million. That changes the logic of the story. The bottleneck is no longer parent-level solvency. The bottleneck is the ability to move cash from the subsidiaries up to the parent. Even the remaining solo debt terms are no longer especially restrictive: the loan carries prime plus 0.8%, the remaining tenor is 5.75 years, and early repayment is allowed at any time without penalty.
Parent-level covenants also do not look like the immediate constraint anymore. In the board report, the ratio between income from distributions and current maturities over the preceding 12 months stood at 4.53 at year-end 2025, versus a minimum of 1.2, and parent equity stood at about NIS 276 million versus a floor of NIS 140 million. So the bank at the parent is still a formal gate for distributions, but at year-end 2025 it was not a tight one.
Lease obligations sharpen the same point from another angle. On a consolidated basis, lease liabilities still stood at about NIS 54.3 million at year-end 2025. On the solo balance sheet, the parent carried only about NIS 3.1 million. That tells you where a meaningful part of the operating cash burden still sits: below the parent, in the same places where cash must first satisfy financing rules before it can move upward.
Why Cash Below the Parent Is Still Not Automatically Shareholder Cash
This is the core of the continuation. Note 9b says explicitly that the subsidiaries are financed mainly through non-recourse project finance, and that cash distributions from subsidiaries to the parent or to other group entities are subject to financial covenants, coverage ratios, and additional conditions. The crucial extra sentence is that the restrictions do not apply only to dividends. They also apply to shareholder-loan repayments and excess-cash transfers. That is exactly the kind of detail a superficial reading misses.
In Poland, the wind-project financing allows up to two distributions per year, and only if the relevant project company meets a historical 12-month DSCR of at least 1.2 and only if the distribution does not create a loan breach. At the same time, the project companies must also maintain a debt-service coverage ratio of 1.1. The report says that all of the wind project companies were in compliance at year-end 2025, and for the material Suchan loan it disclosed an actual ratio of 1.65.
In Israel the picture is similar, but with different thresholds. At Helios and SP Solar Profit, the breach threshold is DSCR of 1.08 and the distribution threshold is 1.17. The actual historical DSCRs disclosed at year-end 2025 were 1.40 and 1.43, respectively. Again, the point is not that the cash is blocked by distress. The point is that the gate is open only conditionally. Sunflower is not staring at a covenant wall, but every shekel still passes through a locked door.
This chart matters precisely because it does not show distress. At year-end 2025 Sunflower was not a company being choked by lenders. That is why the real question becomes more subtle: not whether distributions are technically impossible, but how much cash will actually make it through the financing structure and on what timetable.
The same logic applies even where the parent seems to have an advantage, through shareholder loans. At Sunflower Energy Services, year-end 2025 debt included about NIS 31 million of bank loans and about NIS 29 million of shareholder loans. Those shareholder loans are subordinated to the senior bank debt, though they rank ahead of distributions to other shareholders. On paper that looks like a cleaner route for the parent to pull cash upward. But Note 9b closes that door conceptually: shareholder-loan repayments themselves are also restricted under the financing agreements. So an intercompany loan is not the same thing as free parent cash.
Asset Sales: What Became Cash, And What Is Still Conditional
At this point the asset-sale story separates into two very different buckets. Prime is already close to finished cash. Greenlight is not.
| Transaction | Headline consideration | What has already become cash | What is still conditional |
|---|---|---|---|
| Prime | About NIS 76.76 million | About NIS 47.7 million was received at completion, and the remaining NIS 29 million was paid on 23 Feb 2026, plus accrued interest | After the February payment, the full consideration was completed |
| Greenlight | About NIS 36.4 million | Management guides to about NIS 20 million of net free cash flow, if completed | About NIS 2.1 million is deferred until two systems totaling 0.711 MW are connected and approved; the deal is also subject to closing conditions and adjustments |
Prime changes the picture in a meaningful way because it proves two things at once. First, the consideration actually did move up to the parent rather than remaining just a receivable on paper. Second, part of that cash was used almost immediately to continue cleaning up solo debt. So the disposal was not just a balance-sheet improvement in an accounting sense. It materially strengthened the top cash layer of the structure.
Greenlight requires a more cautious reading. The headline is NIS 36.4 million, but the company itself does not frame that as the cash that will ultimately sit at the parent. It says expected net free cash flow is about NIS 20 million. The footnote explains that this already includes repayment of about NIS 4 million of project-level bank debt at one of the project companies. In addition, about NIS 2.1 million of the consideration is deferred until two under-construction systems are connected and the necessary approvals are obtained.
There is one more small but important detail. Until the remaining consideration is paid in Greenlight, the company and the buyer will share the lease cost of the under-construction systems equally. That does not make the deal unattractive. It does remind the reader that even the next disposal does not convert one-for-one from headline consideration into immediately reachable shareholder cash. Part of it is delayed, part of it is netted against debt, and part of it still runs through real operating obligations.
That is why the right conclusion is that Sunflower's disposals have already accomplished two of the three critical steps. They reduced debt, and they lifted a meaningful cash layer to the parent. They have not removed the financing rings around the project cash that remains in the group, and they have not turned Greenlight into certain cash until the conditions, timing, and deferred pieces are resolved.
Bottom Line
The answer to "how much cash is really reachable to shareholders" is not one number. It is three rings.
The first ring: cash already sitting at the parent. That picture has improved materially. At year-end 2025 the parent held NIS 109.3 million of cash and equivalents, and after the balance-sheet date it also received the remaining NIS 29 million of Prime consideration, while solo debt fell from NIS 21.7 million to roughly NIS 5 million.
The second ring: cash that looks close, but is not closed yet. That is Greenlight. If it completes on the reported economics, it can add about NIS 20 million of net free cash flow. But that still depends on completion, on closing conditions, on a deferred consideration element, and on continued lease sharing until the balance is paid.
The third ring: cash that remains inside the project companies. That is cash that should not be credited automatically to parent shareholders. Not because the company is breaching covenants, but because the agreements explicitly say that moving cash upward is subject to coverage tests, distribution restrictions, shareholder-loan repayment limits, and required approvals.
That also gives the clean-balance-sheet story its proper nuance. The disposals were not cosmetic. They really did move part of the value all the way up to the parent and sharply reduce solo debt. But they did not transform the entire consolidated cash pile into cash that shareholders can count as equally reachable at the same moment. The next proof point for Sunflower is no longer whether it can sell assets to buy time. It has already done that. The next proof point is whether, once that time has been bought, the remaining project base can keep sending real cash up the chain on terms that work not just for lenders, but for shareholders.
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