ormat 88 298.
(photo credit: Bloomberg)
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
The amount of finance being talked about from FIMI is some
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
Talks are taking place between the fund and the Bronicki
family, but it is not clear whether they will mature into a
Nevertheless any deal between the two sides will require approval
from Bank Hapoalim, which has a lien on the Bronickis’ entire holding in Ormat
As far as is known, the bank is not involved in the
negotiations, but market sources believe Bank Hapoalim sees FIMI as a serious
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.