The partnership will earn Ormat Technologies fully owned subsidiary Ormat Nevada up to $44.4 million in payments from JPM.
Ormat Technologies Inc. (NYSE:ORA) said today that its fully owned subsidiary Ormat Nevada and JPM Capital Corporation (JPM) have entered into a tax equity partnership transaction involving eight geothermal power plants in California and Nevada.
The deal involves Ormat Nevada transferring the plants into a new subsidiary, ORTP, LLC (ORTP), and selling an interest in the limited liability company to JPM. In connection with the closing, JPM paid $35.7 million to Ormat Nevada and will make additional payments estimated by Ormat at 25% of the value of production tax credits generated by the portfolio over time. These extra payments are expected to be made until December 31, 2016 and Ormat estimates they will total $8.7 million.
Ormat CEO Dita Bronicki said, "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. 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."
Published by Globes [online], Israel business news - www.globes-online.com - on January 28, 2013
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