Ormat re-purchases interest in OPC, a holding of its Nevada plants

Alexander Richter 3 Nov 2009

Ormat Technologies re-purchases interest in OPC, a holding of its Nevada plants, held by Lehman-Brothers.

In a release, “Ormat Technologies, Inc. (NYSE:ORA) announced that on October 30 its wholly-owned subsidiary, Ormat Nevada Inc., concluded the purchase of all of the class B membership interests in OPC LLC held by Lehman-OPC LLC, an affiliate of Lehman Brothers Inc., for a purchase price of $18.5 million.

A substantial portion of the sale of the class B membership interests by Ormat was accounted for as a financing. As a result, the repurchase of these interests at a discount will result in a pre-tax gain of approximately $13 million in the fourth quarter of 2009.

OPC LLC was initially established by Ormat Nevada to hold its Desert Peak 2, Steamboat Hills, Galena 2, and Galena 3 geothermal power projects (all located in Nevada) jointly with Morgan Stanley Geothermal LLC, an affiliate of Morgan Stanley & Co. Incorporated, and Lehman-OPC LLC, as institutional equity investors.

The purchase from Lehman-OPC LLC of all of its class B membership interests was concluded pursuant to a right of first offer in favor of each of the members of OPC LLC under its limited liability company agreement.

Ormat Nevada will continue to operate and maintain the projects and will continue to receive initially all of the distributable cash flow generated by the projects until it gets back the capital it has invested in the projects. In addition, in its capacity as a holder of the acquired class B membership interests, Ormat Nevada will now also be entitled to a share of the production tax credits and the taxable income or loss, and the distributable cash flow after it has received its return of capital.”

Source: company announcement via Reuters