Ralco Shareholders to Vote on Acquisition of Loss-Making Subsidiary
Ralco shareholders will vote on acquiring loss-making subsidiary Ralco Energy, previously controlled by the son of Ralco's controlling owners, sparking questions over related-party governance.
Ralco, a publicly traded home appliance importer controlled by the Roziak family, is holding a shareholders' meeting on Tuesday to vote on the acquisition of Ralco Energy. The subsidiary, which imports and distributes solar and energy storage systems, was controlled until recently by Ophir Roziak, the son of controlling shareholders Yaron and Ziva Roziak. Ralco defended the acquisition as a strategic expansion into renewable energy, noting that the purchase price consists solely of contingent consideration tied to future profitability, requiring no immediate cash outlay.
However, financial data included in the shareholders' circular reveals that Ralco Energy has been loss-making since at least 2023, suffering from a decline in sales of solar components over the past year and a half. Until recently, Ophir Roziak served as CEO of the company, and both he and his wife are expected to retain their positions under Ralco's ownership, with Ophir potentially benefiting indirectly from the transaction proceeds.
Ralco Energy is a subsidiary of Yvulei Shemesh Renewable Energy. In 2022, Bank Hapoalim’s investment arm, Poalim Equity, invested 100 million shekels in Yvulei Shemesh at a 500 million shekel valuation, leaving Ophir Roziak with a 66% stake. However, surging interest rates and debt-funded expansion led to severe cash flow difficulties, culminating in the sale of Yvulei Shemesh to PowerGen, the energy arm of Generation Capital, in May 2026. PowerGen acquired the company by covering 120 million shekels in debt, buying out 35 million shekels in owners' loans, and promising up to 20 million shekels in contingent payments.
Under the current deal, PowerGen is offloading the loss-making Ralco Energy while absorbing its liabilities. Ralco will pay PowerGen up to 9 million shekels, contingent on future performance. Ralco reported a strong first half of 2026, with sales rising 5% to 152.5 million shekels and net profit jumping 60% to 13.7 million shekels. The company is traded at a market capitalization of 160 million shekels.
