Delek Rehev and Hailo: When the Technology Option Turns Into a Funding Drain

The main article already showed that 2025 at Delek Rehev cannot be read correctly by looking only at vehicle imports. This follow-up isolates Hailo because it exposes a different gap, not between the import engine and Veridis, but between a technology option that sounds attractive on paper and an illiquid asset that has already moved from equity upside into funding support.

In 2025 that gap stopped being theoretical. Delek Rehev recorded about NIS 242 million of fair value loss on Hailo inside finance expense, out of a total fair value loss of about NIS 301 million on securities measured through profit and loss. The carrying value fell to about NIS 170 million, or about $53.4 million, from about NIS 412 million at the end of 2024. At the same time, cumulative investment in Hailo had already reached about $58.5 million by the end of 2025. After years of prior uplifts, the year-end value had already dropped below the total dollars invested.

That matters not only because of the size of the write-down. The company also did not recognize a deferred tax asset mainly against the fair value losses in this line, so the hit was not meaningfully cushioned by tax. The more troubling signal came after the balance sheet date: in January 2026 Delek Motors had already moved from being an equity holder to being a lender, with a $9 million loan and a possible second $3 million tranche if no liquidity event occurs by June 2026.

Four Points To Hold In Mind

• Hailo is the core problem, not side noise. The roughly NIS 242 million loss accounts for most of the total fair value decline in the securities portfolio, and by itself was almost four times the group's 2025 pre-tax profit.
• The concentration did not disappear with the write-down. Even after the markdown, Hailo still represented about NIS 170 million out of about NIS 225.8 million of unlisted securities, roughly three quarters of the illiquid portfolio.
• The 2025 valuation does not rest on a signed exit. It rests on valuation indications from a SPAC process that were already below prior funding-round levels, and then took another roughly 26% haircut for time and lock-up.
• The post-balance-sheet loan changes the character of the story. Once the same position that already destroyed value also requires bridge financing at 1.5% monthly interest, rising to 3%, it can no longer be framed as just an option.

The Loss Is Already Inside The Income Statement

Delek Rehev can fairly argue that Hailo is not part of the import core. But the 2025 accounting shows why that argument is no longer enough. The Hailo loss did not remain a mark on a peripheral line. It flowed directly into finance expense, which means it became part of how the market reads earnings.

Net finance expense rose to about NIS 564 million from about NIS 442 million. Of that, about NIS 301 million was a net fair value loss on securities measured through profit and loss, and about NIS 242 million of that was explicitly attributed to Hailo. The filing also describes the Hailo hit as a material write-down recorded in the fourth quarter. This was not a footnote. It was one of the main reasons full-year pre-tax profit ended at only about NIS 64 million.

What matters most is the shape of the hit. The Hailo loss was not offset by a matching tax benefit because the company did not recognize a deferred tax asset mainly against the fair value loss in this line. That is why the pass-through to the bottom line remained so sharp. If the goal is to understand why Hailo is no longer just a distant source of optionality, this is the key point: it is no longer outside the statements. It is sitting in the mechanism that drives reported profit.

The chart makes clear that the issue is not only a one-off markdown, but also concentration. Two other vehicle-tech investments lost about NIS 40 million in 2025 and fell to about NIS 55 million combined, yet Hailo still remained the dominant position in the book. Even after the write-down, most of the illiquid technology risk still sits on one name.

The Year-End Value Rests On A Liquidity Event That Has Not Closed

This is where the story gets sharper. Near the end of 2025 and during the first quarter of 2026, Hailo engaged an investment bank to explore a listing process through a SPAC merger, among other things to raise the funds needed for its operations and continued development. It received several proposals, but the valuation indications were already below the value implied by earlier funding rounds. By the end of March 2026 there was only a non-binding memorandum of understanding.

The valuation work leaves little room for romance. An external valuer set the year-end value based on the average of the SPAC proposals and then applied about a 26% reduction for the time needed to complete the transaction and for the lock-up that would apply to the holding afterward. The calculation used a risk-free rate of about 3.5% and annual volatility of about 129%. That is no longer a clean growth valuation. It is the valuation of an illiquid asset that depends on a financing or liquidity event and still does not know when that event will actually close.

The most interesting detail is that in the scenario where the listing does not happen at all, using a value that is about 30% below the average proposals, while preserving Delek's existing preference rights, leads to the same holding value. That does not mean the risk disappears. It means the year-end carrying value already embeds weaker economics, and still depends on Hailo getting through a financing or liquidity event without another step down.

The Option Has Also Become A Cash Requirement

This is the section that turns Hailo from a technology option into a potential funding drain. After the balance sheet date, in January 2026, Delek Motors signed a loan agreement with Hailo. The first tranche, $9 million, was already advanced. A further $3 million tranche is available in June 2026 if no liquidity event occurs by then. The loan carries monthly interest of 1.5%, rising to 3% if that condition is not met within 12 months. Maturity is the earlier of a liquidity event or five years from each draw.

The controlling shareholder, which also holds Hailo shares, simultaneously advanced $3 million with an option for another $1 million on the same terms. That matters because it shows the funding need was not viewed as a marginal issue for Delek Rehev alone. This is a concrete bridge, with a high financing cost, until a liquidity event happens if it happens.

That chart shows the shift from an illiquid investment into another funding layer. By the end of 2025 Delek Rehev had already invested about $58.5 million, the year-end carrying value stood at about $53.4 million, and after the balance sheet date a new $9 million loan was added with a possible further $3 million tranche. This is no longer a passive position waiting for an exit. It is a holding that is still consuming capital.

What The Market Should Measure From Here

For Hailo to start counting as an option again rather than a burden, three things have to happen. First, the SPAC process has to move from a non-binding memorandum into a closed deal that creates a real liquidity event. Second, Delek Motors cannot be dragged into funding rounds beyond what has already been disclosed. Third, the next reporting periods need to show that value is stabilizing rather than stepping down again whenever conditions weaken.

If one of those three things fails, the market is left with a fairly hard reading: Hailo is still an asset that could theoretically create value, but inside late-2025 Delek Rehev it behaves mainly like an illiquid, concentrated position that remains exposed to repricing and already requires bridge funding. The conclusion is sharp: the technology can still work, but the accounting and the loan already say this is not just an option.