Ray TLV: What Really Sits Behind The NIS 122 Million Expected Cash Table

The main article framed the core gap correctly: Ray TLV’s problem is not whether project value exists, but how far that value still sits from timely, accessible cash. The expected net cash table, NIS 122.3 million, is where that gap is easiest to misread. It is not a shareholder-cash table.

This table blends three very different layers: inventory that is consolidated in the accounts, effective exposure through joint ventures, and one contractual right at Nirim that comes from a services agreement with a company owned by a controlling shareholder. Each layer can still be economically valuable. They simply do not carry the same quality, seniority, or path to common shareholders.

So the real question is not whether NIS 122.3 million is “real” or “fake.” The real question is what kind of number it is. As a project-upside map, it is useful. As a map of cash that is one step away from shareholders, it is far more aggressive.

What The NIS 122.3 Million Table Actually Measures

The report is explicit if you read the footnotes closely. The table is presented on the company’s effective-share basis, under management assumptions, and on the assumption that the projects are monetized on the planned timetable. It also says that project financing includes bank financing, other financing, and partner financing at the project level, but excludes financing for the company’s ongoing operating activity at Ray TLV Nadlan. On top of that, the numbers are before tax and before financing costs that are not capitalized into inventory.

So NIS 122.3 million is not the end of the bridge. It is a project-level outcome after expected future costs and existing project financing, but before several other layers that still sit above common shareholders.

The first important point is that this number is not the same thing as expected gross profit. Expected gross profit in the table is NIS 104.8 million because that line also deducts the investment already sitting in the books. Expected net cash is higher, NIS 122.3 million, because it is not asking what the historical carrying cost of the projects is. It is asking how much cash is supposed to remain after sale, future costs, and project debt. Those are two different languages: accounting profit and project monetization.

The second important point is that the table is not built from one uniform quality of asset. Out of the NIS 122.3 million, only NIS 73.3 million comes from projects sitting inside consolidated land inventory. Another NIS 14.3 million comes from two joint ventures, Raul Wallenberg and Matalon. And another NIS 34.7 million, almost 28% of the whole table, comes from Nirim, a project that does not sit in consolidated inventory at all and instead rests on a contractual right.

That has an immediate implication: about 40% of the expected net cash comes from layers that are not ordinary consolidated inventory. That is not an argument against the table. It is an argument against reading it too literally.

Why The Consolidated Balance Sheet Looks So Much Smaller Than The Table

This is the core gap. Consolidated land inventory is only NIS 75.9 million. But the project table presents a total invested base of NIS 152.6 million. Almost all of that difference comes from the fact that the table looks through the joint ventures rather than stopping at the consolidated balance sheet.

Raul Wallenberg and Matalon are held through Shon Ray, where the company has 49% ownership rights and 50% voting rights. In the project table, the exposure to these two projects is shown on an effective basis, NIS 61.249 million for Raul Wallenberg and NIS 15.449 million for Matalon, together NIS 76.698 million. That is almost half of the entire cost base behind the table.

But the consolidated financial statements do not carry that as land inventory. They carry it through the equity-method investment line, and there the number is only NIS 7.702 million. The split matters: NIS 3.874 million relates to the company’s share in equity and accumulated results, and another NIS 3.827 million relates to loans measured at fair value through profit and loss. In other words, the report itself is telling the reader not to confuse effective project economics with what currently sits on the public company’s own balance sheet.

The capital structure underneath the JV layer also explains why. Shon Ray ended 2025 with NIS 156.5 million of land inventory, but also NIS 80.6 million of bank and other credit and NIS 74.0 million of shareholder loans. Total current liabilities there are NIS 154.9 million, against only NIS 7.9 million of equity. That does not mean there is no value. It does mean Ray’s slice of the upside sits behind heavy financing layers and does not flow automatically upward as distributable cash.

There is an even sharper accounting clue. Loans that the company has made to equity-accounted ventures are not carried at face value. They are carried at fair value because they do not have a contractual maturity and their coupon does not necessarily reflect fair value. The valuation uses market rates of 10% to 14.1%, and the nominal debt amount including accrued interest is about NIS 4.09 million, versus a carrying value of NIS 3.827 million. That is a strong hint that even inside the JV layer, the path from project value to accessible cash is neither short nor clean.

The Biggest Line In The Table, Nirim, Does Not Sit In Inventory At All

If one line jumps off the page, it is Nirim. The table attributes NIS 40 million of expected sale value to it, NIS 5.276 million of expected future costs, and therefore NIS 34.724 million of both expected gross profit and expected net cash. At the same time, the project has no carrying amount inside consolidated land inventory. So this is not a land parcel that was acquired, booked on the balance sheet, and is now expected to be sold at a gain. It is a different economic structure.

Note 10 defines it clearly. The subsidiary entered into a services agreement with A.B. Nirim Yizmut, a company wholly owned by Avi Romano, one of the company’s controlling shareholders. Under the amended agreement, the subsidiary is entitled to consideration derived from the realizable value of Nirim Yizmut’s rights and from the sale value of the subsidiary’s own rights and obligations in agreements with rights holders across the area. From that consideration, 10% is payable to Nirim Yizmut, and there is also a mechanism for reimbursing third-party costs and obligations up to NIS 2 million.

The implication is straightforward: NIS 34.7 million at Nirim does not rest on consolidated inventory. It rests on a contractual formula. That formula could still generate substantial value if the area matures into a strong monetization event. But it is materially different from a project such as Herzl or HaGra, where at least there is a consolidated asset visible on the balance sheet. Here, common shareholders depend not only on project monetization but also on contractual allocation mechanics and conduct with a related-party counterparty.

That is why Nirim should be read as the lower-quality line inside the NIS 122 million table, even though the absolute number is large. Not because it must be worth less, but because it is more contractual, more commercially contingent, and less anchored in an asset already sitting inside the consolidated accounts.

What Is Left For Shareholders After This Adjustment

Once the table is decomposed this way, it becomes much easier to see why expected net cash is only the start of the analytical work. To move from there to cash that is truly accessible to common shareholders, the reader still has to clear four stations.

The first is the realization layer. Is the number tied to consolidated inventory, to a joint venture, or to a contractual right. The quality changes already at that point.

The second is the seniority layer. In the joint ventures, banks and shareholder loans sit ahead of equity. At Nirim, the contractual consideration already includes a 10% deduction in favor of the related-party counterparty and a reimbursement mechanism for third-party costs and obligations. Even if value exists, it does not all belong to the common shareholder layer.

The third is what the table explicitly excludes. The report says in plain terms that the numbers are before tax, before non-capitalized financing costs, and without financing for the company’s ongoing operating activity at Ray TLV Nadlan. So NIS 122.3 million is not an after-everything number. It is a before-holding-friction number.

The fourth is time. The whole table assumes realization on the planned timetable. Once timing slips, interest, partner financing charges, loan fair values, and the quality of contractual rights all start moving. In a small company with a tight financing structure, time is not just an outside variable. It is part of the economics.

The bottom line is quite sharp: NIS 122.3 million is a project-portfolio number, not a shareholder-pocket number. It is useful because it explains why the company can still have economic substance despite a stressed balance sheet. But it does not answer the harder question, how much of that value will actually work its way through joint ventures, service-agreement structures, and financing layers before it reaches common shareholders.

That is exactly why the gap between NIS 75.9 million of consolidated inventory and NIS 152.6 million of invested base in the project table is not just a presentation issue. It is the difference between assets that already sit in the accounts and value that still has to pass through several gates before it becomes accessible cash.