Ormat sells stake in Momotombo plant in Nicaragua for $7.5m
Ormat Technologies sells stake in Momotombo Power Company, operating company of the 22 MW Momotombo geothermal power plant in Nicaragua for $7.5m.
Ormat Technologies, Inc. (NYSE: ORA) announced yesterday that Ormat Holding Corp., a wholly owned subsidiary, “has sold its stake in the Momotombo Power Company (MPC), the operator of the Momotombo geothermal power plant in Nicaragua, to a private company for $7.5 million, approximately one year before the scheduled termination of the concession arrangement with the Nicaraguan owner.
The 22MW power plant that the company operates under a concession since 1999 sells geothermal power to two off takers, DISNORTE and DISSUR, under a 15-year contract. The $7.5 million consideration represents a prepayment of the expected EBITDA of the plant through the scheduled expiration of the contract. As a result of the sale, the Company expects to record a capital gain of approximately $2.5 million in the second quarter of 2013.
“With the expected expiration of the concession and off take agreements and the determination that it is unlikely to extend the concession, we concluded that selling our stake in the plant early, maximizes the value of the asset.
We will continue to prudently manage our capital and deploy resources to maximize shareholder value,” said Dita Bronicki, Chief Executive Officer of Ormat.”