Nofar Energy Bondholders Back Company Amid Regulatory Dispute, Two Series to Be Redeemed Early for 400 Million Shekels

Nofar Energy's stock dropped 5.4% on the Tel Aviv Stock Exchange yesterday and has lost over 13% in the past month, reducing its market value to 6.7 billion shekels from a previous 10 billion shekels. The decline follows a conflict with the Israel Securities Authority, which claimed the renewable energy company failed to meet financial covenants outlined in its bond trust deeds. Controlled by Ofer Yanai, Nofar disputed the regulator's interpretation and quickly announced plans to amend the trust deeds and convene bondholder meetings for five bond series to approve these changes.

Bondholders of the two largest bond series, totaling 2 billion shekels, voted in favor of the amendments, effectively supporting Nofar's legal stance on the covenants. Some voters also hold Nofar shares or equity stakes in the company. A minor, dispersed bond series worth 10 million shekels failed to reach quorum, postponing its meeting. However, holders of series A and E opposed the changes and demanded compensation, which Yanai refused. Consequently, Nofar declared it would exercise its right to early voluntary redemption of these two series, costing the company 400 million shekels. The company stated it has sufficient funds for this redemption without raising additional debt. The redemption will include a premium over current prices, causing series A and E bonds to rise in trading today.

Additionally, Nofar's board resolved to reduce the company's leverage ratio to 75% within one year and 70% within three years, indicating current leverage exceeds these targets. The board also plans to increase Nofar's equity capital to 1.5 billion shekels.