Israeli InterCure raises NIS 66 million from shareholders and new investors - Israel News

Medical cannabis InterCure, led by Ehud Barak (Chairman) and Alexander Rabinovich (CEO), announced that it had raised NIS 66 million, with an option to increase the amount to NIS 107 million for the rehabilitation of its facilities in Kibbutz Nir Oz in the border area of the Gaza Strip.

The investment is made at a price close to the market price of the shares, which gives InterCure a market capitalization of NIS 235 million.

The capital is raised from existing shareholders, including Rabinovich, and two new investors who will become stakeholders in the company: technology investor Yaron Yakobi and real estate developer Tzahi Hagag. Each will hold more than 5% of InterCure once the round ends.

InterCure also announced that it had secured a 30 million shekel credit line from an undisclosed Israeli bank.

“This investment marks a pivotal moment for InterCure, providing the momentum needed to restart our growth and move us forward,” Rabinovich said. “After a difficult period with our southern facility at Kibbutz Nir Oz, this financing represents a huge vote of confidence from investors who believe in the company’s growth strategy alongside one of the world’s leading banks. Israel. We believe this investment will enable us to strengthen our position in Israel and drive our expansion into key international markets, with a focus on Europe and Germany in particular. »

“We remain hopeful for a speedy end to the ongoing war and the return of all hostages, including our employees and close friends from the kibbutzim surrounding the Gaza Strip, to their homes and we are confident in our ability to contribute significantly to the re-establishment of the post – the efforts to rebuild this area after the war.

A man inspects the leaf of a cannabis plant at a medical marijuana plantation in northern Israel. (credit: NIR ELIAS/Reuters)

InterCure, which until the end of 2023 was a growing and profitable company, suffered damage to its Nir Oz production plant, worth NIS 200 million, on October 7. The facility produced half of the cannabis strains the company sells in Israel, its main market.

Establishments affected by the October 7 attacks are entitled to compensation

Under Israeli law, the company’s southern facility, located in an area affected by the terrorist attack and the Gaza war, is entitled to full compensation for all direct and indirect damages caused by the attack of Hamas, including the shortfall.

“To date, the Company has received advances totaling tens of millions of NIS from the Israeli authorities as part of this compensation. These advances, which represent only a small portion of the Company’s total damages, supported the initial phases of the ongoing restoration efforts. However, given the prolongation of the war and the fact that the last significant advance was not received from the Israeli authorities until April 2024, the current funding will enable the Society. to move forward successfully its recovery and restoration efforts without further delay.

“We hope that this financing will enable the Company to return to the growth and profitability rates it had achieved before the war, during the year 2025. The Company expects to receive substantial additional payments from the authorities Israeli payments, to which the Company is entitled, and works closely with its professional advisors and the authorities to receive these payments,” the InterCure announcement said.

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In the first half of 2024, InterCure achieved revenue of NIS 125 million, 40% lower than in the corresponding period of 2023. It recorded a net profit of NIS 1.4 million for the period, compared to NIS 5.1 million for the corresponding period. Due to the damage to the southern facility, it recorded a loss of NIS 62 million for all of 2023.