Liam Harish Asakim: How Much Of The Cushion Really Depends On Controllers, Guarantees And Related-Party Infrastructure

Where The Safety Net Actually Sits

The main article argued that the bond issue bought Liam time, but still did not prove that project surplus in Harish would turn into accessible cash. This follow-up isolates the next question: how much of that extra time was bought through a platform that can stand on its own, and how much through a controller-backed perimeter of guarantees, services, and soft capital.

Three points stand out in the notes. First, the direct operating layer is extremely thin: only three employees, almost no fixed assets, and core management sitting outside payroll. Second, shareholder support did not disappear, it changed form: at the end of 2024 the company still carried a NIS 20.3 million related-party loan balance, and during 2025 about NIS 31 million of shareholder and related-party loans were reclassified into equity after the bond issue. Third, both execution and credit still lean on the related-party perimeter: a controller-linked EPC contract, management agreements, a service agreement, and very large guarantees provided without consideration.

So the report is not presenting a small developer that has already built full independence. It is presenting a public vehicle that came to market with a meaningful controller support system underneath it. That is a real stabilizer. But it also means the stronger 2025 cushion is not only the product of sales, gross margin, and bank financing.

The chart gets the proportions right. By year-end there was barely any direct shareholder loan left on the balance sheet, but that would be the wrong conclusion to stop at. The support simply moved into other layers: softer capital, a huge guarantee umbrella, and management and execution infrastructure that sits outside the direct platform.

This Is A Lean Platform, Not A Self-Contained Developer

On paper the company describes a classic development model: locating land, acquiring rights, planning, improving, developing, building, marketing, and selling. But in the same section it says that its projects are expected to be built through construction companies, while the company itself manages execution progress and appoints consultants. At the report date, its current projects under construction were all in Harish.

The marketing layer is also not fully internal. Housing units are marketed through external marketing companies working alongside an internal marketing setup. But the human-capital note shows how narrow that direct layer really is: just three employees, a CFO, a sales and marketing manager, and an office manager. The company also says it has no fixed assets of consequence other than several software programs and computers.

That is a core reading point. Liam does not currently carry a broad operating machine inside the reporting entity. It carries a lean development shell that organizes financing, planning, marketing, and oversight, while a meaningful part of the critical capability sits with contractors, advisers, and related parties. That does not automatically make it weak. Many smaller developers operate like this. But it does mean that becoming a public bond issuer did not suddenly make the platform operationally self-standing.

There is even a small paradox in the disclosure. The company says it has no material dependence on specific employees. Formally that may be true because the direct employee base is small. Economically, the right reading is that the sensitivity moved from payroll lines into management, service, and execution agreements.

This chart shows what the public-company transition did to the recurring related-party cost base. Management fees rose by almost two and a half times, and office and maintenance costs also doubled. Anyone who reads only the three-employee headline and skips the related-party note misses the real operating structure.

Management And Office Infrastructure Sit Outside Payroll

CEO Guy Sachli's management agreement was updated before the bond issuance was completed. Instead of monthly management fees of NIS 55 thousand plus VAT, the management company he fully owns now receives NIS 75 thousand per month plus VAT, indexed, together with reimbursement of reasonable expenses and possible bonuses subject to the compensation policy and required approvals. The agreement is open-ended and can be terminated with three months' notice.

The active chair, Ahikam Cohen, works through the same kind of structure. His management company is entitled to NIS 75 thousand per month plus VAT for an approximately 75% role, again with expense reimbursement, possible bonuses, an open-ended term, and three months' notice. In other words, the two people carrying development, transactions, financing, and day-to-day leadership are not part of the normal employee count. They sit in a separate contractual layer.

Alongside that, a service agreement has been in place since January 2024 with Liam Engineering Urban Renewal Ltd. Under that agreement the service provider supplies bookkeeping and office services for NIS 25 thousand per month plus VAT, until the company instructs it to stop. The result is simple: not only senior management, but also the recurring administrative backbone depends on a related-party provider.

This is not only a governance point. It is also an economic question. As the company grows, it will have to show whether this wrapper remains efficient, whether the price remains reasonable, and whether some of these functions move inside the company. Until then, it is hard to argue that the platform's resilience comes from a deep internal operating base.

The Balance Sheet Improved, But Part Of The Improvement Came From Subordination, Not Fresh Cash

During 2022 through 2024 the controlling shareholders advanced loans bearing 7% annual interest, capitalized into principal, and scheduled to be repaid from project surplus, with a forecast repayment date of June 2029. Even before 2025 this was already patient capital rather than ordinary commercial debt. The company also explains that on initial recognition it measured those loans at fair value, and the gap between fair value and the nominal loan amount was recorded in capital reserve as a shareholder benefit.

In March 2025 the structure was softened further. With the completion of the bond issuance, repayment of the remaining loans and interest became subject to audit-committee and board approval, distribution tests, and any other approvals required by law. As a result, about NIS 31 million of shareholder and related-party loans were reclassified into equity when the bond issue was completed.

That is an important move, but it has to be read correctly. The dependence did not disappear, it simply moved down the stack. At the end of 2025 the direct balance of shareholder and related-party loans was only NIS 369 thousand, versus NIS 20.3 million at the end of 2024. Anyone looking only at the remaining debt line could conclude that the company had largely weaned itself off shareholder support. In practice, a large part of that support was simply turned into softer capital that is friendlier to bondholders.

And that ties directly into the covenant frame. At the end of 2025 equity stood at about NIS 32.9 million and the equity-to-balance-sheet ratio at 17%, both above the bond acceleration thresholds. So the reclassification was not a technical footnote. It sat underneath the equity cushion that the public debt is measured against. But the key point remains: a meaningful part of that cushion came from the controllers accepting a lower place in the capital structure, not from earnings the company had already generated and retained.

Execution And Credit Also Run Through The Related-Party Perimeter

In May 2025, Psagat Hatrpez signed an agreement with Liam Engineering Ltd., the controlling shareholder of the parent company, for the full execution works in the project. The price is NIS 155.753 million plus VAT. At first glance that can look like an efficiency move that centralizes control and reduces friction. But the fine print matters here as well: the agreement excludes excavation, shoring, and soil-foundation works, excludes levies and charges borne by the developer, excludes certain insurance items, and excludes tenant changes. The contractor is also allowed to subcontract parts of the work.

So even this related-party turnkey layer is not a full transfer of risk. It mainly moves a very important part of execution into the controller perimeter. If the project runs smoothly, that can look like efficient integration. If there are budget deviations, timetable slippage, or commercial disputes, the fact that this sits with a related party will quickly become a central checkpoint again.

The guarantee layer is even sharper. Shareholders or related parties provide guarantees in the ordinary course of business, without any consideration, to secure obligations of the company or of its held companies. At the report date the amounts in force were about NIS 350 million for the company and another NIS 95 million for held companies, and all of them are unlimited in amount. That is a very large safety net relative to the size of the platform.

The real point is that a routine reading of the balance sheet no longer captures this dependence fully. The formal bond collateral rests on pledged accounts and project surplus from the two core projects, but the broader credit perimeter still relies on personal and related-party support. That is why Liam's resilience cannot be judged only through the cash balance, the debt-to-collateral ratio, or the direct shareholder-loan balance at year-end. The off-balance-sheet support perimeter matters too.

What Would Make The Cushion Look More Self-Standing

There is a fair counter-thesis here. One can argue that this structure is perfectly rational for a company of Liam's size. A lean platform, external management, a close contractor, and controller guarantees can create flexibility, save fixed cost, and allow a faster move into the public market. That is not an unreasonable argument.

But if that is the counter-thesis, it still has to pass three practical tests. First, as the projects progress, part of the guarantee umbrella has to be replaced by actual released surplus. Second, the related-party execution agreement in Psagat Hatrpez has to move through milestones without creating a long list of exceptions that empties out the supposed benefit of control. Third, over time the company has to show whether it is building deeper direct capability, or whether it remains a thin public wrapper whose resilience depends structurally on controller-linked services and undertakings.

The bottom line is clear: in 2025 the controllers are not only shareholders in Liam. They are part of the infrastructure holding the model together. That is real support, but it is also structural dependence. Until project surplus actually replaces the guarantee umbrella and the soft capital underneath it, Liam's cushion will remain partly internal and partly borrowed.