Ormat receives $44.4 million in tax equity deal for eight of its U.S. plants
Galena 2 plant, United States (source: Ormat)
Alexander Richter
29 Oca 2013
Ormat Technologies has entered a tax equity transaction valued at $44.4 million for eight of its geothermal power plants in California and Nevada, transferring the plants into a new subsidiary and selling an interested to JPM Capital Corp.
In a release yesterday, Ormat Technologies, Inc. (NYSE: ORA) announced “that Ormat Nevada Inc., a wholly-owned subsidiary , and JPM Capital Corporation (JPM) entered into a tax equity partnership transaction involving eight geothermal power plants in California and Nevada.
Under the transaction, Ormat Nevada transferred the plants into a new subsidiary, ORTP, LLC (ORTP), and sold an interest in the limited liability company to JPM. In connection with the closing, JPM paid approximately $35.7 million to Ormat Nevada and will make additional payments estimated by Ormat at approximately 25% of the value of production tax credits generated by the portfolio over time. The additional payments are expected to be made until December 31, 2016 and total approximately $8.7 million.
Certain consents to facilitate the transaction were obtained from the holders of the senior secured notes issued by Ormat Nevada’s subsidiaries, Orcal Geothermal and Ormat Funding, which are the intermediate holding entities of the eight geothermal power plants included in ORTP. Ormat Nevada will continue to operate and maintain the power plants.
“Our partnership with JPM, began in early 2011 when they invested in our OPC portfolio. Their decision to participate in a second transaction is a demonstration of their confidence in Ormat and its management,” said Dita Bronicki, chief executive officer of Ormat. “This transaction will enable us to maximize the use of our available production tax credits and accelerated depreciation that we would not have otherwise been able to utilize either at all or for a long time due to the fact that as a growth company we generate more deductions for tax purpose than we are currently able to utilize. We would like to thank JPM for their continued confidence and look forward to continuing to take advantage of similar transactions when they are appropriate. Going forward, we will continue to take steps to ensure that we maximize the use of our assets to drive value for shareholders.”
RLR Consultants advised Ormat Nevada on the structuring and placing of the transaction, and Chadbourne & Parke LLP represented Ormat Nevada as transaction counsel.
