On the way to an IPO? Oranim Group is on the way to raising 600 million shekels of debt in Tel Aviv, intended to replace bank debt

The Oranim Group, owned by Menachem and Shira Oren, one of the oldest construction groups in the country, is coming to the stock exchange. The group will attempt to raise 600 million shekels of debt on the Tel Aviv Stock Exchange to replace 523 million shekels of bank debt to Leumi and Mizrahi-Tefahot. The bank loans carry an interest rate of prime plus 1.75%, and the company hopes that by issuing bonds, it will be able to receive a lower interest rate.

The company is raising debt for a single project, but it is likely a move intended to prepare the ground for a possible IPO of the entire group in the future, based on a valuation of billions of shekels. Such an IPO is a complex move from a tax and technical perspective, involving the merger of a large number of subsidiaries.

The project being issued is SEA ONE, a ready-made luxury assisted living facility of 270 apartments on the seashore of Rishon LeZion. This is the first assisted living facility of the company, which aims to establish a chain of assisted living facilities in the future. Oranim, founded in 1978 by Menachem Oren (79), has initiated quite a few projects in the country and abroad, but earned its reputation from initiating luxury housing on the coastline. Among its projects on HaYarkon Street in Tel Aviv are the Royal Beach hotel, which was sold to Isrotel, Teumei HaYam and Pninat HaYam, as well as the Gali Sapir tower on the Herzliya coast.

Today, the group is initiating the Lev HaIr plan in Ramat HaSharon, which includes 570 housing units above the planned metro, in three apartment towers and one office tower. The project company's equity stands at 386 million shekels. The fair value of the real estate recorded a decrease of 16 million shekels in 2025 and an increase of 24.8 million shekels in 2026. The company has not yet presented current operating revenues from the property.

Oranim purchased the land, an area of 12 dunams on the seashore in Rishon LeZion, whose designation is for hotels or assisted living, in 2017 for 200 million shekels. For the company, this is its first entry into the assisted living field. The company added the former CFO of Ad 120 and began planning its entry into the field. According to the prospectus, as of now, only three apartments have been occupied out of all the units, but 21 apartments have been sold. Marketing of the project began in the second half of 2023, but proceeded at a slower pace than planned, partly against the backdrop of the "Iron Swords" war.

During 2024, the company began to increase marketing efforts, but this was still not enough to realize the marketing goals at the planned pace. Since this is a field where a client's decision can take more than half a year, the company estimates that with the opening of the house and the occupancy of the first residents, the pace of sales is expected to improve, subject to market conditions and the security situation.

Unlike the nature of assisted living facilities, where entry is usually in the mid-70s, SEA ONE is aimed at those aged 60 and over, who are capable of leading an independent lifestyle and belong to a medium-high socio-economic class. Another audience is the established Jewish population from abroad, who are interested in moving to live in Israel. Entry into the project is possible via two payment tracks. The first is a deposit track with reduction, including a payment of 2.8-7.2 million shekels upon entry and an annual forfeiture amount of 64-280 thousand shekels. The second track is a full deposit, and includes a payment of 3-14 million shekels upon entry, without forfeiture. In both tracks, the resident pays 105-290 thousand shekels per individual in annual maintenance fees, or 121-333 thousand shekels per couple. Leumi and Discount Underwriting are leading the issuance, together with the Ardinast law firm.