ORIX to acquire 22% ownership stake in Ormat

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ORIX to acquire 22% ownership stake in Ormat

Ormat Technologies and ORIX Corporation has announced that ORIX will acquire an approximately US$627 million ownership stake in Ormat from FIMI ENRG Limited Partnership, FIMI ENRG, L.P., Bronicki Investments, Ltd., and senior members of management, representing in the aggregate an approximately 22.1% ownership position in Ormat.

The per share sale price to be paid by ORIX at closing (subject to satisfaction of customary conditions, including regulatory approvals) is US$57, which was the prevailing market price at the time that ORIX, FIMI and Bronicki reached agreement on the commercial terms of their transaction. The parties expect closing (including with respect to the agreements described below) to occur in the third quarter of 2017.

Under terms of a new Commercial Cooperation Agreement between the two companies, Ormat will have exclusive rights to develop, own, operate and provide equipment for ORIX geothermal energy projects in all markets outside of Japan. In addition, Ormat will have certain rights to serve as technical partner and co-invest in ORIX geothermal energy projects in Japan. Also, ORIX will assist Ormat in obtaining project financing for its geothermal energy projects from a variety of leading providers of renewable energy debt financing with which ORIX has relationships in Asia and around the world.

Under related agreements, ORIX will have the right to designate three persons to be appointed to an expanded nine-person Ormat board of directors and also propose a fourth person to be mutually agreed by Ormat and ORIX to serve as a new independent director on the Ormat board. In addition, for so long as ORIX is entitled to board representation, ORIX will be subject to certain customary standstill restrictions, including an effective 25% cap on its voting rights. ORIX will also have certain customary registration rights with respect to the shares of Ormat common stock that it will own.

Gillon Beck, Ormat's Chairman, said:

"We are excited to partner with ORIX, one of the world’s leading diversified companies with operations in 36 countries, to advance the interests of both companies. With ORIX's significant presence around the world, access to capital and strong positioning throughout Asia, we believe Ormat can enhance and accelerate its strategic growth plans in the renewable energy market. We expect this collaboration will expand the number and quality of growth opportunities that Ormat enjoys around the world, particularly in Asia." Mr. Beck added "These past years have been exciting ones characterized by continued growth and strategy execution. I would like to thank the devoted management and employees of Ormat for their relentless efforts. ORIX is joining an amazing company and I am confident that Ormat will continue to excel and reach new highs."

Mr. Yuichi Nishigori, Head of Energy and Eco Services Business Headquarters of ORIX, stated:

“We are delighted to be partnering with Ormat to support the company’s expansion in the global geothermal energy market. As one of Asia’s leading investors in the renewable energy sector, and with a growing portfolio of renewable energy investments around the world, we recognize the importance of having clean, reliable, baseload power such as that which geothermal provides, and we believe that the geothermal sector has the potential to become an increasingly large component of the world’s overall energy mix. Given Ormat’s technological leadership and increasingly global portfolio of operations, we believe the company is well positioned to help lead this expansion, and we look forward to working with the Ormat board and existing management team to facilitate the company’s future growth and value creation.”

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