Kardan Israel After the Report: Where Parent-Level Cash Really Gets Stuck
The main article already identified the bottleneck at the parent. This follow-up shows why: at year-end 2025 the solo parent held a NIS 180.3 million long-term loan asset, a working-capital deficit of about NIS 299 million, and only NIS 2.6 million of cash, while the Geva exposure and project-level guarantees still delay the path from value to accessible cash.
The Parent Is Not Sitting on Cash, It Is Sitting on a Claim for Future Cash
The main article already identified the bottleneck correctly: value is being created lower in the structure, but cash is not moving up at the same speed. This follow-up isolates only the solo parent layer. The issue is not whether the assets are good. It is not even mainly a profit question. It is a much simpler and harder question: what actually sits in the parent cash box today, and what is still waiting on a project, a partner, a bank, or the next refinancing step.
On an all-in cash-flexibility lens, the picture is fairly sharp. At the end of 2025 the solo parent shows only NIS 2.6 million of cash and cash equivalents, NIS 1.4 million of financial assets at fair value, and against that a NIS 180.3 million long-term loan asset. At the same time, the parent's contractual liquidity schedule carries NIS 514.1 million of obligations due within a year, plus NIS 122.0 million of financial guarantees payable on demand. That is the core of the issue. The parent's main asset is not cash. It is a receivable.
The report itself does not try to hide that. It presents a solo working-capital deficit of about NIS 299 million and explains why the board does not view that as a liquidity problem: projects are expected to mature, short-term loans can be extended, longer debt can be raised against income-producing real estate, and additional assets could be pledged or realized if needed. That wording matters because it makes clear that the solution on the table is not an existing cash cushion. It is dependence on maturation, refinancing, and monetization.
| Solo parent layer | 31.12.2025 | Why it matters |
|---|---|---|
| Cash and cash equivalents | NIS 2.6 million | The parent's actual cash on hand |
| Financial assets at fair value | NIS 1.4 million | Only a marginal liquidity layer |
| Long-term loan asset | NIS 180.3 million | A large financial asset, but not free cash |
| Contractual obligations due within one year | NIS 514.1 million | The near-term payment stack at the parent |
| Financial guarantees on demand | NIS 122.0 million | Not certain debt today, but real contingent liquidity pressure |
The solo cash-flow statement reinforces exactly the same conclusion. In 2025 the parent burned NIS 36.4 million in operating cash flow and another NIS 106.7 million in investing activity. Only NIS 143.9 million from financing activity allowed it to finish the year with NIS 2.6 million of cash. Put differently, before fresh financing, the parent did not build a cash cushion organically.
That is the point. A group can create value in projects and subsidiaries, and still leave the parent with a thin cash box. That is exactly what Kardan Israel's solo statements show.
Geva Is a Source of Future Value, Not a Liquidity Cushion
This is where the parent-level problem becomes concrete. The cooperation agreement with Geva is built so that Kardan Israel funds Geva's share of required equity up to NIS 45 million, and if Kardan Israel chooses to inject more equity than that, Geva's share of the extra amount also comes as a loan. Since 1 December 2023, that additional funding carries annual interest at prime plus 7%, without compound interest, and is secured only by a pledge over Geva's rights in the joint assets and their profits, with no recourse to Geva.
There is also a separate loan that Kardan Israel has already advanced to Geva, also secured only by Geva's rights in the joint assets and their profits. That balance stood at about NIS 3.7 million at year-end 2025, is to be repaid out of Geva's share of joint-project profits, and since 1 December 2023 has carried annual interest at prime plus 2.667%. At the report date, Kardan Israel was still advancing NIS 100 thousand per month to Geva as an additional loan on the same terms, and total loans from Kardan Israel to Geva, principal plus interest, had already reached about NIS 181 million.
| Geva funding layer | What was set | Why it matters |
|---|---|---|
| Funding Geva's share up to NIS 45 million | Kardan Israel advances Geva's equity share as a loan | The partner is not bringing all of its equity in cash |
| Funding above NIS 45 million | Since 1 December 2023, at prime + 7% | The nominal yield rises, but the cash still stays trapped until project realization |
| Separate Geva loan | NIS 3.7 million at year-end 2025, repayable from Geva's share of profits, at prime + 2.667% since 1 December 2023 | Here too, the path to cash runs through project profit, not Geva's own cash box |
| Total Kardan Israel loans to Geva at report date | About NIS 181 million | The exposure is already far larger than the parent's cash cushion |
That is what makes the solo balance sheet easy to misread at first glance. The parent carries a large financial asset, but that asset does not behave like money in a bank account. It behaves like a right to receive money if and when projects mature, if and when profits are distributable, and if and when the layers above the bank and the partner allow it. So the interest accruing on the Geva loan can improve the economics of the asset, but it does not solve the parent's liquidity question.
Guarantees and Refinancing Still Keep the Parent in the Story
Anyone looking for comfort in the idea that the exposure is now ring-fenced at project level is missing another key layer. Even after separating Geva, the parent remains tied into the projects through guarantees, joint-and-several liability, and refinancing steps that still require bank signatures and continued execution.
At Shoham, Kardan Israel's share of project financing stood at NIS 53.7 million at year-end 2025, and the company also had another roughly NIS 27 million of solo bank financing tied to that project. After the balance-sheet date that financing was repaid and replaced with alternative funding, with Kardan Israel's share in the new project financing standing at NIS 90 million. That looks like progress, but the report also says that as of the report date the binding project-finance agreement had still not yet been signed, even though a facility had been agreed with the bank. At the same time, Kardan Israel also guarantees Geva's debt to the bank, and at the report date the Kardan-plus-Geva share of that debt stood at about NIS 136 million.
At Kfar Saba the picture is even tighter. At year-end 2025 Kardan Israel's share stood at NIS 39.0 million in financing for the commercial component, NIS 77.8 million in the closed logistics construction facility, and NIS 14.3 million in financing advanced to Serverz. None of those facilities is non-recourse, and Kardan Israel is jointly and severally liable with Geva to the financing bank. In addition, with respect to Serverz, Kardan Israel guarantees half of Serverz's liabilities to the bank, including Geva's share.
| Project | Financing and guarantee position | Why this keeps the parent cash-constrained |
|---|---|---|
| Shoham | NIS 53.7 million Kardan share of financing at year-end 2025, alternative NIS 90 million financing after the balance sheet, and a project-finance agreement still unsigned at the report date | Even when the financing moves forward, the parent still depends on final bank execution and remains exposed to Geva's debt |
| Kfar Saba | NIS 39.0 million commercial financing, NIS 77.8 million logistics closed facility, and NIS 14.3 million of Serverz financing on Kardan's share | Exit cash first has to pass the bank waterfall and the guarantee structure before it becomes clean parent cash |
That does not mean the projects are weak. Quite the opposite. Some are progressing well, and some have already moved closer to occupancy or monetization. The point is different: even when value is created, it does not leap directly into the parent's cash box. It first passes through a lending bank, a partner funded by the parent, and a guarantee structure that still connects Kardan Israel to the risk.
What the 30 March 2026 Credit Update Really Changed
This is where it is important not to read too much into a helpful headline. The update published on 30 March 2026 does mark a certain easing: it says that certain borrowings at Kardan Nadlan Yizum vePituach, and also the credit taken in connection with the Shoham project, no longer constitute reportable credit for the company. That is useful because it signals that some facilities have fallen below the company's own reportable-materiality threshold.
But this is not a liquidity release. The filing does not say that the Geva loans vanished. It does not say that the NIS 180.3 million long-term loan asset in the solo parent converted into cash. It also does not say that the guarantees were cancelled or that the parent no longer depends on refinancing. It says something narrower: on a disclosure-threshold basis, some credit lines are no longer reportable.
So the credit update improves the headline, but not the core mechanism. Even after it, Kardan Israel's solo parent remains a structure in which the cash box is small, the short-term debt burden is large, and the main asset is a claim on future money still sitting inside projects and partnerships.
Bottom Line
The main article was right about the bottleneck, and this follow-up only sharpens it. Kardan Israel is not stuck because it lacks value. It is stuck because, at the parent layer, that value arrives first as a loan, a pledge, a guarantee, or project financing long before it arrives as cash.
That also explains why the NIS 20.2 million of dividends received by the parent in 2025 does not change the picture on its own. Against NIS 514.1 million of contractual obligations due within a year, NIS 122.0 million of on-demand financial guarantees, and a working-capital deficit of about NIS 299 million, that dividend is helpful. It is not a solution.
What has to happen for this read to improve in a real way? First, Geva loans need to start coming back in cash rather than merely accruing interest. Next, Shoham and Kfar Saba need to move from a phase in which the parent still carries financing and guarantee pressure into a phase in which the projects themselves begin releasing distributable surplus. Only after that does the discussion move from accounting value to accessible value.
Until then, anyone looking at Kardan Israel through the solo parent should remember one thing: profit may show up at the top, but the cash still does not.
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