Shoval Engineering Seeks Court Approval to Extend Warrant Expiration
Shoval Engineering has filed an urgent court motion to extend the expiration of its Series 1 warrants to January 2028, aiming to secure 28.25 million NIS in potential capital as the stock trades below its strike price.
Public real estate and construction company Shoval Engineering is taking legal steps to prevent the expiration of its Series 1 public warrants. The company filed an urgent motion with the Nazareth District Court under Section 350 of the Companies Law, seeking court approval to convene a holders meeting and secure an exemption from standard timelines to extend the exercise period by an additional year, until January 2028.
The filing was prompted by a significant gap between the current market share price and the options' strike price. Shoval Engineering shares are currently trading at approximately 7.38 NIS, while the exercise price stands at 10.23 NIS. The stock has dropped 21% this year. Because the warrants are currently out-of-the-money, management fears that holders will fail to exercise them by the original January 2027 expiration date, rendering them worthless.
The Series 1 warrants, led by CEO Yishai Roth, were issued to the public in late January 2025 as part of the company's initial public offering on the Tel Aviv Stock Exchange. Each warrant grants the holder the right to convert it into a company share at a fixed exercise price of 10.23 NIS. A total of approximately 2.81 million warrants were issued in this series, and their full exercise could inject net proceeds of about 28.25 million NIS into the company's treasury.
Company directors emphasize that extending the validity of the options serves the best interests of both the firm and its security holders. Should the warrants be fully exercised during the extension period, the move will inject fresh equity of roughly 28.25 million NIS, bolstering liquidity and supporting ongoing business operations.
Shoval Engineering has asked the court to establish an expedited schedule for approving the arrangement to complete all required approvals with the stock exchange and option holders on time. Management clarified that the proposed outline does not alter the exercise price and that issuing new securities would entail higher and more complex costs.
Earlier strategic moves by Shoval Engineering include a leadership reshuffle over a year ago, appointing Yishai Roth as CEO and Sagi Barzani as Deputy CEO alongside his CFO role. Additionally, in June, the Competition Authority approved Shoval's acquisition of the veteran construction firm Itzhak Stern & Co., allowing the developer to secure an in-house execution arm amid rising construction costs and labor shortages following restrictions on Palestinian workers.
