The Hailo pit: Delek Automotive transferred Veridis shares worth 645 million shekels to Delek Motors

The investment wounds in the technology company Hailo continued to bleed in Delek Automotive's reports in the second quarter as well. Delek Automotive transferred 15 million shares of Veridis to its subsidiary, Delek Motors. The shares were transferred to avoid the possibility that damage to Delek Motors' equity would lead to non-compliance with bank covenants for loans granted for the acquisition of Veridis in 2018.

The transfer, noted in the second-quarter reports, was intended, "among other things, to strengthen the equity of Delek Motors," noted Delek Automotive, controlled by Gil Agmon. The transfer of shares, worth about 645 million shekels, is an exceptional event stemming from the pit left by the company's investment in Hailo. Regarding this investment, Delek Automotive wrote off 242 million shekels at the end of 2025, and in the current reports, it wrote off an additional 161 million shekels.

Sources close to the company claim that over the years, Delek Motors, which is wholly owned by Delek Automotive, has transferred about 650-700 million shekels to Delek Automotive, including for the acquisition of Veridis. In effect, this is a repayment of funds to close the Hailo incident and prevent consequences for Delek Motors. Following the transfer, 10% of Veridis shares will be held by Delek Motors and 37% by the parent company, Delek Automotive.

Delek Motors is the active company that imports and sells Mazda, Ford, BMW, Nio, and Dongfeng vehicles. This is the company's traditional activity, serving as its cash flow provider and profit center. Upon acquiring control of Veridis in 2018, Delek Automotive received a 1.05 billion shekel loan from banks, with covenants relating to the equity-to-balance ratio of Delek Motors. The company emphasized that there is no event of non-compliance with Delek Motors' covenants, though concerns exist toward the end of the year when compliance is measured.

Delek Automotive shares have plummeted by 41% since the beginning of the year, to a value of only 1.75 billion shekels, returning to their end-of-2020 value. Since reaching a peak in August 2022, the company has lost two-thirds of its value. Figures for the first half of 2026 explain this decline: the company delivered 9,005 vehicles compared to 15,500 in the first half of 2025 — a 42% drop. The decline was sharpest for Mazda, with 1,786 cars delivered compared to 5,571 in the corresponding period of 2025 (a 68% decrease). In the second quarter, the company's market share fell to 3%.

While the automotive sector's revenues recorded an increase in the second quarter to 748 million shekels, first-half revenues fell to 1.67 billion shekels. Delek Automotive recorded a working capital deficit of 481 million shekels at the end of the second quarter. Operating profit for the second quarter rose to 132 million shekels, but financing expenses of 226 million shekels related to the Hailo write-off led to a quarterly loss of 88 million shekels. The first half of 2026 ended with a loss of 13 million shekels, compared to a profit of 92 million shekels in the first half of 2025.