Negev Ceramics returns to the stock exchange after 14 years: raised 87 million shekels

Negev is returning to the Tel Aviv Stock Exchange, this time through a bond issuance, 14 years after its shares were delisted. The company completed a tender for institutional investors, raising 87 million shekels.

The company is jointly owned by the Viola Credit fund and a group led by businessman Yariv Lerner, each holding 50% of its shares. Negev is engaged in the import, marketing, distribution, and sale of home design and construction finishing products, including tiles, sanitary ware, shower enclosures, and bathroom cabinets.

Negev offered the bonds without collateral and set a maximum interest rate of 7.5%. The company had hoped to raise 109 million shekels in debt, expecting net proceeds of 105 million shekels after commissions and grants. In the tender for institutional investors, orders totaling 100 million shekels were received. However, against the backdrop of market uncertainty, the company's reliance on the slowing construction industry, and the lack of collateral, orders at an interest rate of 7.5% or lower amounted to 87.1 million shekels. The final proceeds from the issuance were 87.3 million shekels.

The series was issued with a duration of 3.8 years. The bond fund will be repaid in six installments: two of 10% each at the end of 2027 and 2028, and four of 20% each from December 2029 to December 2032. According to the prospectus, Negev intends to use the proceeds to repay 70 million shekels of the 100 million shekels in liabilities due in the coming year, most of which consist of short-term bank loans.

Negev Ceramics was delisted in 2012 when its then-controlling shareholder, Africa Israel Industries (part of Lev Leviev's Africa Israel group), purchased the remaining public shares. At the time, the company faced difficulties, partly due to heavy investments in a new factory in Yeroham, with debts reaching 700 million shekels. A 2017 debt arrangement led to the acquisition of control by Viola and Lerner.

Negev ended the first quarter of 2026 with revenues of 118 million shekels, a 3% increase compared to the same quarter in 2025. Operating profit reached 6.8 million shekels, up from 2.1 million. After reducing financing expenses, the company moved from a loss of 2.6 million shekels in Q1 2025 to a profit of 4.1 million in Q1 2026. In 2025, revenues grew by 13% to 460 million shekels, and net profit reached 6.1 million shekels, compared to a loss of 839,000 shekels the previous year.

However, the profitability improvement in Q1 2026 was mainly driven by exchange rate devaluation. Due to its exposure to the residential construction market, the company remains vulnerable to the industry slowdown, which may impact results in coming quarters.

The Negev group stated: "The issuance and becoming public is part of our work plan, not a move stemming from an urgent need for capital. We chose to raise bonds at an interest rate that seemed appropriate under current market conditions and rejected orders at higher rates. The proceeds will be used for acquisitions in various fields, including construction finishing, and for expanding our activity in Israel."