Where Solair’s Cash Story Really Sits: Bonds, Shareholder Loans, and Accessible Value

Where The Main Article Stopped, And What This Follow-up Is Isolating

The main article argued that Solair already has a large pipeline, but 2026 still looks like a funding-proof year. This follow-up goes one layer deeper and asks a narrower question: where the cash really sits. Not at the level of project EBITDA, not at the level of portfolio value, but at the level of cash the listed company can actually move, loans that have already gone down into project entities, and the debt layer still financing the bridge period.

That is why the right framing here is listed-company all-in cash flexibility. In a consolidated report it is easy to confuse cash somewhere inside the group with cash that is actually accessible at the parent. At year-end 2025 the group reported NIS 73.5 million of cash and cash equivalents, but also NIS 165.5 million of pledged deposits. In the separate parent-company statements, by contrast, Solair itself had NIS 66.8 million of cash and cash equivalents and only NIS 8.9 million of pledged deposits. The liquid layer that really sits at the top is much narrower than the consolidated picture suggests.

This distinction matters because in March 2026 the board concluded that the company has no liquidity problem. But that conclusion does not rest only on cash already sitting at the top. It rests on a combination of existing cash, signed financing agreements and memoranda of understanding, and expected project cash flows that include the repayment of shareholder loans made to partners. That is an important statement, but it needs to be read correctly: it is a statement about future financing access and future upstream flows, not about excess parent cash already waiting in the bank.

That chart tells the entire story of the cash layer. In the separate statements, cash was not built in 2025 through operations. It was built through financing. Parent operating cash flow was negative by about NIS 0.3 million, investing cash flow was negative by NIS 281.2 million, and the bridge was closed by NIS 296.1 million of positive financing cash flow.

Where The Value Actually Sits: Shareholder Loans And Project Entities

Once the separate balance sheet is in focus, the gap between value and cash becomes much clearer. Alongside NIS 66.8 million of cash, the parent holds NIS 35.5 million of current loans to held companies, NIS 462.1 million of long-term loans to held companies, NIS 359.6 million of partner loans, and NIS 17.9 million of related-company balances. In other words, the parent balance sheet mostly sits as financing extended downward, not as cash retained upward.

The parent cash flow statement reinforces the same reading. During 2025 Solair advanced NIS 210.2 million to held companies and another NIS 112.6 million to partners. During the same year it recorded zero repayments from held companies and zero repayments from partners. Cash recovered from the investment layer came instead from NIS 36.3 million of proceeds from the sale of held companies, NIS 5.0 million from the sale of systems under development, and NIS 6.1 million from the repayment of a related-party loan.

The direction of travel in 2025 therefore remained downward. The parent continued to finance the pipeline. It has not yet reached the stage where mature assets are returning cash upward at a pace that can fund the next layer of growth. That is exactly why accessible listed-company cash still looks thin relative to the size of the story.

There is also a constructive point here, but it needs to be framed carefully. In its economic forecast for the existing project portfolio, the company says its effective share of free cash flow from those projects is about 86%, because of shareholder loans on the partners’ share whose balance stood at about NIS 367 million at the end of 2025. The logic is clear: as long as those loans have not been repaid, Solair has priority over a larger slice of project-level cash flow. That is real value, but it is still value sitting inside the project layer that first has to become loan repayment and only then parent cash.

Project Finance Helps The Projects, Not Automatically The Parent

This is the analytical friction at the center of the story. Solair is clearly closing financing. It is just not always closing it in the layer equity investors in the listed company care about most.

Resolar holds a revolving credit facility of EUR 55 million through the end of 2027, at Euribor plus 6.5%, with actual draw capacity governed by a borrowing-base test tied to project status. As of the report date, outstanding borrowings under the agreement stood at about EUR 48 million against a borrowing base of about EUR 55 million. The facility is secured by pledges over shareholdings and accounts, and it can also be used for equity completion in projects where Resolar owns only 25%, subject to specific conditions.

That is meaningful financing, but it sits at Resolar and project-company level, with dedicated collateral and dedicated draw conditions. It is not a free parent-company cash pool.

The same is true at Calasparra. In June 2025 the project signed senior financing for two sub-loans of about EUR 12.5 million and EUR 6.73 million, with full security over the project company’s shares and accounts and a minimum DSCR of 1.05. The first covenant test is only scheduled for June 30, 2026. This is classic project finance: it helps connect and fund the asset, but it does not automatically turn the asset into freely distributable parent cash.

Sancho and Calbuco point in the same direction. In February 2026 the final financing agreement for Sancho was signed following an earlier memorandum of understanding. In January 2026 a non-binding memorandum of understanding was signed for the financing of the Calbuco wind project in Chile, with senior debt of up to USD 65 million. But Calbuco makes the point even more clearly: drawdowns are conditional, among other things, on equity and shareholder loans of at least 35% of project cost, alongside permits, due diligence, full EPC documentation, and pledged collateral. So even when senior debt advances, it still requires more equity and more shareholder-loan support from above.

The broader takeaway is that Solair is building a deep project-finance layer. That is positive, because without it there is no connection and no operation. But it is not the same as saying that cash is already accessible to listed-company shareholders. Between the project layer and the parent layer sit collateral packages, covenants, shareholder-loan repayment mechanics, and pledged accounts.

The Bond Market Still Closes The Parent-Level Bridge

That is why the parent bridge continues to run through the bond market. In February 2025 the company expanded Series B by NIS 143.2 million par value, for gross proceeds of about NIS 150.5 million. In January 2026 the board approved another private placement of NIS 188 million par value, and in February 2026 it was completed for gross proceeds of about NIS 199.7 million.

What matters is not only the amount, but the use of proceeds. The company stated explicitly that the money is intended for the acquisition of a connected and under-construction solar portfolio in Poland, for continued builds in Spain and Chile, and for general corporate activity. That is direct evidence that the listed-company cash layer is still required to finance the distance between a promising project and an asset that actually produces FFO.

The January 2026 special-meeting notice adds another revealing layer. The audit committee and board said this was the optimal way to raise debt at that point in time, and that it did not materially increase leverage because it roughly matched the debt removed from the company’s statements as a result of the roof-project sale. The analytical reading of that sentence is straightforward: Solair is still replacing one bridge financing layer with another. It sold one debt-bearing asset layer, but then raised fresh unsecured parent debt to keep feeding the next layers.

The security and covenant section sharpens the distinction further between financial comfort and accessible cash. Series B is unsecured, and its holders rank as unsecured creditors of the company. At the same time, the main financial covenants still show clear headroom:

But it is important to look at how that comfort is created. For the Series B net-debt calculation, the company deducts NIS 117.1 million of lease liabilities and also NIS 558.0 million of liabilities tied to assets that are not yet commercial or are still within one year from commercial operation or acquisition. That is a valid covenant definition. It is simply not the same thing as an accessible-cash definition. So wide covenant room does not mean value has already moved up to the parent. It mainly means the company can continue financing the bridge period without immediate pressure from the indenture.

Conclusion

Solair’s cash story really does sit somewhere different from where many readers first look. It does not sit mainly in the parent’s year-end cash balance, and it does not sit fully in project EBITDA tables either. It sits in three separate layers: parent-level bonds bridging the interim period, shareholder loans already pushed down into projects and partners, and project finance that strengthens the assets but remains pledged and conditional.

The constructive part is that shareholder loans on the partners’ share, NIS 367 million at the end of 2025, give the company economic priority that can lift its effective share of future cash flow. The open friction is that until those repayments start showing up in practice, the parent’s accessible cash layer is still being bridged by the bond market and by new financing closings.

So the key question from here is not whether Solair has strong assets. It clearly does. The key question is when that asset layer stops absorbing parent cash and starts returning it. The decisive signals will not be additional megawatts alone, but visible upstream shareholder-loan repayments, a Polish closing that does not require another parent funding bridge, and the first periods in which Spain and Chile look less like cash uses and more like cash sources.