Oranim Group Plans 600 Million Shekel Debt Offering in Tel Aviv to Replace Bank Loans
Oranim Group, one of Israel's oldest construction companies owned by Menachem and Shira Oren, is preparing to raise 600 million shekels through a debt offering on the Tel Aviv Stock Exchange. The funds will be used to refinance existing bank loans totaling 523 million shekels from Bank Leumi and Mizrahi-Tefahot, which currently carry an interest rate of prime plus 1.75%. The company hopes to secure a lower interest rate through the bond issuance.
The debt raise is linked to a single project, SEA ONE, a luxury ready-made senior living residence comprising 270 apartments on the beachfront in Rishon Lezion. This marks Oranim's first entry into the senior living sector, with plans to develop a network of such residences. The project’s equity stands at 386 million shekels, with real estate fair value expected to decline by 16 million shekels in 2025 and rise by 24.8 million shekels in 2026. So far, only three apartments have been occupied and 21 sold, with marketing efforts accelerating in 2024 after a slow start partly due to the "Iron Swords" conflict.
Founded in 1978 by Menachem Oren, Oranim has built a reputation for luxury residential projects along Israel’s coastline, including developments on Tel Aviv’s Hayarkon Street, the Royal Beach Hotel (sold to Isrotel), Sea Twins, Pearl of the Sea, and the Gali Sapir Tower in Herzliya. Currently, the group is also advancing a large urban renewal plan in Ramat Hasharon featuring 570 housing units and office towers.
The SEA ONE project targets residents aged 60 and above who can live independently, focusing on middle-to-upper socioeconomic groups and Jewish expatriates interested in relocating to Israel. Entry options include a deposit with a discount or a full deposit, with annual maintenance fees ranging from 105,000 to 333,000 shekels depending on the payment plan and occupancy status.
Leumi Barak and Discount Bank are leading the underwriting of the bond issuance, with legal counsel provided by Aradnist Law Firm. The bond offering may also serve as groundwork for a potential future full equity listing of Oranim Group, a complex process involving the merger of multiple subsidiaries and a valuation in the billions of shekels.
