Medical cannabis company InterCure (TASE: INCR; Nasdaq: INCR), headed by Ehud Barak (chairperson) and Alexander Rabinovich (CEO), has announced that it has raised NIS 66 million, with an option to increase the amount to NIS 107 million for the rehabilitation of its facility at Kibbutz Nir Oz in the Gaza Strip border area.
The investment is at a price close to the market price of the shares, giving InterCure a market cap of NIS 235 million. The capital is being raised from existing shareholders, Rabinovich among them, and from two new investors who will become parties at interest in the company: technology investor Yaron Yakobi, and real estate developer Tzahi Hagag. Each will hold more than 5% of InterCure when the round is complete.
InterCure has also announced that it has obtained a NIS 30 million line of credit from an Israeli bank, the name of which was not disclosed.
"This investment marks a pivotal moment for InterCure, delivering the momentum needed to reignite our growth and drive us forward," Rabinovich said. "Following a challenging period with our Southern Facility in Kibbutz Nir Oz, this funding, represents a huge vote of confidence from investors who believe in the company's growth strategy, alongside one of the leading banks in 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 particularly.
"We remain hopeful for a swift end to the ongoing war and the return of all hostages, including our employees and our close friends from the kibbutzim surrounding the Gaza strip, to their homes and we are confident in our ability to contribute significantly to the post-war recovery efforts of such area."
InterCure, which until late 2023 was a growing and profitable company, suffered damage to its NIS 200 million production facility at Nir Oz on October 7. The facility produced half of the cannabis strains that the company sells in Israel, its main market.
Under Israeli law, the company's Southern Facility, located in an area impacted by the terrorist attack and the war in Gaza, is entitled to full compensation for all direct and indirect damage from the Hamas attack, including loss of profits.
"To date, the Company has received advance payments totaling tens of millions of NIS from Israeli authorities as part of this compensation. These advances, which represent only a small portion of the Company's total damages, have 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 received from the Israeli authorities only in April 2024, the current funding, will enable the Company to successfully advance its recovery and restoration efforts without further delays.
"We expect that this funding will position the Company to return to the growth and profitability rates it achieved prior to the war, during the year 2025. The Company anticipates receiving additional substantial payments from the Israeli authorities, to which the Company is entitled to, and is working closely with its professional advisors and the authorities to receive these payments," InterCure’s announcement said.
In the first half of 2024, InterCure had revenue of NIS 125 million, 40% less than in the corresponding period of 2023. It posted a net profit of NIS 1.4 million for the period, which compares with NIS 5.1 million for the corresponding period. Because of the damage to the Southern Facility, it posted a loss of NIS 62 million for 2023 as a whole.
Published by Globes, Israel business news - en.globes.co.il - on December 22, 2024.
© Copyright of Globes Publisher Itonut (1983) Ltd., 2024.