Major bondholders supported Nofar — two series that opposed will be redeemed for 400 million shekels

Nofar Energy shares fell yesterday by 5.4% on the Tel Aviv Stock Exchange, losing more than 13% of their value over the past month. The company's market capitalization has dropped to 6.7 billion shekels, down from a previous valuation of 10 billion shekels. The decline stems from a conflict with the Securities Authority, which announced that the company does not meet the financial covenants set in the trust deeds of its bond series.

Nofar, controlled by Ofer Yanai, disputes the Authority's interpretation and moved to amend the trust deeds by convening meetings for holders of its five bond series. Those who voted in favor supported the company's position that its interpretation of the covenants is legally sound. Holders of the two main series, C and D, with a cumulative volume of 2 billion shekels, voted in favor of the company.

However, entities that hold Nofar shares or are partners in its equity investments also participated in the votes. Series B, a small and fragmented series of 10 million shekels, failed to reach a quorum, and the meeting was postponed. Holders of series A and E opposed the changes and demanded compensation from Yanai. After Yanai refused, the company announced it would exercise its right to redeem both series in a voluntary early redemption, costing Nofar 400 million shekels.

The company claims it has the necessary funds for this redemption without needing to raise additional debt. The redemption will be at a premium to the current price, leading to a rise in the trading prices of series A and E.

Simultaneously, Nofar's board of directors decided on the following measures:

1. Reduce the leverage ratio to 75% within one year and to 70% within three years.

2. Increase Nofar's equity to 1.5 billion shekels.