Generation Capital raises 215 million NIS through a convertible bond issuance.

The effective interest rate set for the bonds is 4.37%, and they will be convertible at a price of 0.90 NIS per share until July 2026. The current share price is 0.75 NIS.

The investment fund Generation Capital reported that it successfully completed the institutional phase of its offering of a convertible bond series (Series D). During the tender, demand amounted to approximately 600 million shekels, of which the company received a pre-commitment for the purchase of units totaling approximately 215 million shekels.

The convertible bonds are shekel-denominated (non-linked), and the effective interest rate set in the tender is approximately 4.37%. The bonds will mature in two instalments in 2028 and 2029, and they are convertible at a price of 0.90 NIS per share until June 30, 2026. After this date, the conversion price will rise to 1.20 NIS per share.

The company noted that the proceeds from the issuance will be used to repay existing debt under the fund’s credit facilities, a move that will increase the unused credit lines to approximately 400 million shekels. The interest rate secured in the institutional tender is expected to result in financing cost savings for the fund estimated at around 6 million shekels per year.

“We view the demand and the issuance as an important expression of trust in the fund and its operations,” said Erez Balasha, CEO of Generation Capital. “The entry of many new investors into the fund, alongside the strong demand from existing stakeholders and institutions, reflects the growing interest of the capital market in Generation, and the deep understanding of investors regarding the tremendous growth potential of the fund and its investments. The high pricing of the option component highlights the upside that investors see in the stock. The bond offering is a significant milestone in implementing the fund’s strategic plan to promote its future investments and continue developing its portfolio. We thank the many investors who participated in the institutional tender and continue working diligently to generate significant value for our investors.”

The fund is still attempting to sell its stake in the British transport company, Porterbrook. Three months ago, Generation reported negotiations to sell its stake in the British transportation company for 577 million shekels, but later reported that the buyer faced difficulties, and the fund decided not to extend the exclusivity period in the agreement.

In the third quarter, Generation Capital ended with revenues of 107 million shekels, compared to 117 million shekels in the same quarter last year. The profit totaled 54 million shekels, compared to 69 million shekels in the corresponding quarter. Generation’s stock is trading at a value of 957 million shekels, with a 15.5% increase this year and a 44% increase over the last year.