Bronickis seek extra financing to repay Hapoalim

One of the possibilities being examined is that Ishay Davidi’s private-equity fund FIMI will provide finance that will replace the loan from Bank Hapoalim.

By SHIRI HABIB-VALDHORN/GLOBES
Ormat Industries Ltd. founders Judith and Yehuda (Lucien) Bronicki are seeking sources of finance to repay the NIS 600 million loan they took from Bank Hapoalim to buy 7.6 percent of Ormat. The huge debt was incurred in late 2007, at the height of the challenge from Gazit Inc., controlled by Chaim Katzman and Dori Segal, to the couple’s control of Ormat.
Up until now, the Bronickis have met the interest payments, but the capital falls due at the end of the year. As far as is known, the couple does not have this much funding available, and they are therefore actively seeking finance.
One of the possibilities being examined is that Ishay Davidi’s private-equity fund FIMI will become a “white knight” and provide finance that will replace the loan from Bank Hapoalim. If that happens, the fund will likely demand an option to invest in Ormat shares.
The amount of finance being talked about from FIMI is some $100m.
Another less likely possibility, given the decline in Ormat’s share price over the past two years, is that FIMI will buy some of the Bronickis’ shares in Ormat immediately.
FIMI has been examining the possibility of an investment in Ormat over the past few months. Ormat’s business is in alternative energy, a field that the fund has identified as interesting.
Talks are taking place between the fund and the Bronicki family, but it is not clear whether they will mature into a deal.
Nevertheless any deal between the two sides will require approval from Bank Hapoalim, which has a lien on the Bronickis’ entire holding in Ormat (35.1%).
As far as is known, the bank is not involved in the negotiations, but market sources believe Bank Hapoalim sees FIMI as a serious player.
The Bronickis took the loan to consolidate their control of the company, after Gazit Inc. became a party at interest in it in June 2007, buying Ormat shares valued at NIS 1.3 billion and reaching a 20% stake, part of which has since been sold.
Ormat has a market cap on the Tel Aviv Stock Exchange of NIS 2.3b., and it holds 60% of Ormat Technologies, traded on the New York Stock Exchange at a market cap of $1.02b.