Motag Ironi: bridging expected project surplus to cash actually reachable by the listed company
Follow-up to the main article: in Hameri and Sde Boker, about ILS 12.1 million out of about ILS 27.0 million of year-end expected surplus is equity already invested or still to be invested, not new profit. And the rest does not rise straight into corporate cash either: it first has to pass through project-finance accounts, lenders, and the pledged account of bond series A.
The main article argued that permits and project finance are finally becoming visible, but equity still sets the pace. This follow-up isolates the next question: when the company presents an “expected surplus” at the project level, how much of that number can really climb to the listed-company layer as reachable cash.
Not all surplus is profit, not all profit is cash, and not all cash stays with the company. In the 2 projects that sit exactly at the border between permitting, financing, and execution, Hameri and Sde Boker, a large part of the expected surplus is simply capital the company has already injected or will still have to inject. The rest is first subject to finance agreements, then to pledges, and only after that to the question of what actually remains at the listed-company layer.
This is not a footnote. It is the right way to read the Motag Ironi story. A reader who looks at roughly ILS 27 million of expected surplus across these 2 projects as if it were almost ILS 27 million of future free cash is skipping several critical stops along the way.
What Actually Builds the Project Surplus
The company itself gives the key. In the bridge tables for Hameri and Sde Boker it does not move directly from gross profit to pullable surplus. It first deducts what it defines as measurement gaps between accounting gross profit and the project’s expected economic profit, mainly financing, marketing, and sales items. Only then does it add the equity already invested and the equity still to be invested.
| Project | Expected economic profit | Equity already invested | Equity yet to be invested | Expected pullable surplus in the annual report | Expected release timing |
|---|---|---|---|---|---|
| Hameri 17 | ILS 8.141 million | ILS 4.223 million | ILS 2.977 million | ILS 15.341 million | Q4/2027 |
| Sde Boker 21-23 | ILS 6.693 million | ILS 0.674 million | ILS 4.266 million | ILS 11.633 million | Q1/2028 |
The important number here is not just the surplus itself, but its composition. Together, the 2 projects show about ILS 26.974 million of expected pullable surplus in the year-end report. Out of that, about ILS 12.14 million, roughly 45%, is simply equity already invested or still to be invested. In other words, almost half of this “surplus” is not newly created value above the listed-company layer. It is the future return of money that layer had to put in, or will still have to put in, along the way.
That is the key point. Motag Ironi’s surplus bridge is not primarily a bridge from profit to cash. It is first a bridge from project economics back to the capital tied up in the project.
And even that number is not fixed. In Hameri, expected surplus moved from ILS 15.341 million in the annual report and the January release notice to ILS 15.681 million in the January 2026 presentation. In Sde Boker it moved from ILS 11.633 million in the year-end bridge table to ILS 11.401 million in the January presentation, and then to ILS 10.805 million in the March release notice. The message is simple: project surplus is a live estimate, not a closed cash balance.
When That Number Can Turn Into Cash
Even after understanding that the surplus includes returned equity, it is still wrong to jump to the conclusion that it sits close to the company’s pocket. The 2 financing files themselves show why.
In Hameri, a project-finance agreement with Bank Hapoalim was signed in November 2025, but as of 31 December 2025 the credit had still not been drawn. To open the facilities, the project company had to inject at least ILS 7.2 million of equity, sign sale contracts of at least ILS 9.0 million in aggregate, hold a valid permit, obtain a section 50 tax certificate, and sign with an execution contractor. If those conditions were not met by 1 February 2026, and at most within a further 21 days, the bank was entitled to cancel its commitment to make the credit available. Only if cumulative sale contracts reached at least ILS 12.256 million by 1 August 2026 could the opening equity threshold fall to ILS 5.77 million.
In Sde Boker, the picture is similar, but more exposed because the agreement was only signed in January 2026. The initial equity requirement there stands at ILS 4.913 million, subject to early sales of at least 2 units and at least ILS 9.04 million in value. After that it can fall to ILS 4.193 million, and later to ILS 3.9302 million, but only if sales and execution progress through the required milestones. Section 50, a contractor, the full security package, and a longer document chain are also required there.
| Project | Project-finance status around year-end 2025 | Initial equity requirement | What still has to happen before money really moves |
|---|---|---|---|
| Hameri 17 | Finance agreement signed in November 2025, but credit not yet drawn at year-end | At least ILS 7.2 million, with a possible step-down to ILS 5.77 million later | Equity injection, early sales, section 50, contractor, security package, and timing compliance |
| Sde Boker 21-23 | No active project finance was in place at year-end 2025; the agreement was signed on 13 January 2026 | At least ILS 4.913 million, with later step-downs tied to sales and execution | Equity injection, at least 2 early sales, section 50, contractor, security package, execution start, and schedule compliance |
That is why cash already visible inside the system is not the same as surplus already reachable by the company. At year-end 2025 the company held about ILS 13.803 million of cash in project-finance accounts. That cash exists, but it is tied to the finance agreements and the bank supervisor. It does not prove that the company has already completed the climb from project cash to listed-company cash.
This chart sharpens the distinction that is easiest to miss. In January and March 2026 the company received about ILS 9.972 million and ILS 5.388 million from the trustee as its allocated share of bond proceeds for Hameri and Sde Boker. That is financing cash that already reached the corporate layer. But it is not project surplus generated by Hameri and Sde Boker. That surplus, according to the annual report, is only expected to show up in Q4/2027 and Q1/2028.
In other words, the cash that has already moved to the company is cash that finances the path toward future surplus, not cash produced by that surplus.
Even After Release, the Money Does Not Land Directly in Free Corporate Cash
This is the stop that changes the read most at the listed-company level. The bond series A indenture does not rely on a generic pledge. It requires the company and the project companies to transfer all surpluses, to the extent they exist and are released from the project-finance accounts, into the bondholders’ pledged account, and to give the lending banks irrevocable instructions to transfer that money there. The project list includes 8 projects, including both Hameri and Sde Boker.
That means that even if surplus is created at the project, and even if the lender allows it to be released, its first stop at the group level is not the company’s free current account but the pledged bond account. By the report date, the balance in that account already stood at about ILS 15.3 million.
Sde Boker adds another blocking layer. Under the January 2026 finance agreement, the remaining balance in the project account becomes surplus only after the credit is fully repaid, while earlier release is purely at the financiers’ discretion and only if the cash credit has been fully repaid and no further cash use is expected. At the same time, the company signed a subordination deed under which, as long as the financiers have not been paid in full, the project company may not pay and the company may not receive or demand any amount on account of shareholder loans.
Hameri is not cleaner. The annual report itself states that beyond the surplus bridge, the project also carries about ILS 3.549 million of loans from private investors, controlling shareholders, or related parties, to be repaid only at project end and only after secured mezzanine loans are repaid. That means the listed-company layer does not meet a “clean” surplus there either. It meets a surplus that first goes through an order of priorities.
| Stop | Who controls the money | Why it matters for the listed-company layer |
|---|---|---|
| The project-finance account | The lender and the supervisor | Cash first serves the project and its own credit |
| Surplus release | The lender only, and often only after full repayment | There is no automatic right to pull cash just because the project looks profitable on paper |
| The pledged account of bond series A | The bondholders | Released surplus is first swept into the public collateral layer |
| Shareholder or investor loans inside the project | Subordinated or repaid late | Even inside the company’s own layer, not every shekel returns in the same order or at the same time |
So the right route is not “project surplus” and then “company cash.” The right route is: economic profit, return of equity, project-credit repayment, lender approval, transfer into the pledged account, and only then a check of what, if anything, is truly left as flexible cash.
Bottom Line
Motag Ironi’s surplus bridge looks much less generous when read like a cash path rather than like a presentation slide. Across Hameri and Sde Boker, year-end 2025 shows about ILS 26.974 million of expected pullable surplus, but only about ILS 14.834 million of that is expected economic profit. The remaining ILS 12.14 million is capital that can come back up only if the projects advance, the lenders release it, and the cash survives every stop in between.
That is exactly why the equity bottleneck from the main article did not disappear just because permits, project finance, and trustee releases started to arrive. Future surplus is supposed to solve part of the problem, but it sits on top of the same financing layer that created the problem in the first place. Until surplus is actually released from project-finance accounts, climbs into the pledged account, and starts to expand the company’s real room for maneuver, these numbers are better read as conditional project value, not as almost-assured corporate cash.
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