Ormat Technologies, Inc. (NYSE: ORA) (“Company” or “Ormat”)
announced today its intention to offer $350 million aggregate
principal amount of Green Convertible Senior Notes due 2027 (the
“Notes”) in a private offering to persons reasonably believed to be
qualified institutional buyers pursuant to Rule 144A under the
Securities Act of 1933, as amended (the “Securities Act”), subject
to market conditions and other factors. The Company also expects to
grant to the initial purchasers an option to purchase, within a
13-day period beginning on, and including, the date on which the
Notes are first issued, up to an additional $52.5 million aggregate
principal amount of Notes.
The Notes will be unsecured senior obligations
of the Company. The Notes will mature on July 15, 2027, unless
earlier converted, redeemed or repurchased. Interest will be
payable semiannually in arrears on January 15 and July 15 of each
year, beginning on January 15, 2023.
The Notes will be convertible at the option of
the holders, prior to the close of business on the business day
immediately preceding January 15, 2027, only under certain
circumstances and during certain periods, and thereafter, at any
time until the close of business on the second scheduled trading
day immediately preceding the maturity date. Upon conversion, the
Company will pay cash up to the aggregate principal amount of the
notes to be converted and pay or deliver, as the case may be, cash,
shares of the Company’s common stock or a combination of cash and
shares of the Company’s common stock, at the Company’s election, in
respect of the remainder, if any, of the Company’s conversion
obligation in excess of the aggregate principal amount of the notes
being converted. The Notes will not be redeemable at the Company’s
option prior to July 21, 2025. On or after July 21, 2025 and
on or prior to the 41st scheduled trading day immediately preceding
the maturity date, the Notes will be redeemable at the Company’s
option if the last reported sale price of the Company’s common
stock has been at least 130% of the conversion price then in effect
for at least 20 trading days (whether or not consecutive) during
any 30 consecutive trading day period (including the last trading
day of such period) ending on and including the trading day
immediately preceding the date on which the Company provides notice
of redemption at a redemption price equal to 100% of the principal
amount of the notes to be redeemed, plus accrued and unpaid
interest to, but excluding, the redemption date. The terms of the
Notes, including the interest rate, conversion rate, and principal
amount, will depend on market conditions at the time of pricing and
will be determined by negotiations between the Company and the
initial purchasers.
The Company expects to use (1) up to $25
million of the net proceeds from this offering to repurchase
concurrently with the closing of this offering shares of its common
stock in privately negotiated transactions at a price per share
equal to the closing price of such common stock on the date of the
pricing of this offering, (2) a portion of the net proceeds from
this offering to pay the cost of the capped call transactions (as
described below), (3) approximately $221.9 million to fund the
previously announced prepayment of its Series 3 Bonds, and accrued
and unpaid interest thereon, and make-whole payments, and
(4) the remainder for general corporate purposes. The Company
intends to allocate an amount equivalent to the net proceeds from
this offering to finance and/or refinance, in whole or in part, one
or more eligible green projects in accordance with the Company’s
Green Finance Framework. In addition to proceeds from the offering,
the Company may use cash from operations or borrowings under its
credit facilities in order to effect such allocation.
In connection with the pricing of the Notes, the
Company intends to enter into privately negotiated capped call
transactions with one or more of the initial purchasers or
affiliates thereof and/or other financial institutions (the “Option
Counterparties”). The capped call transactions are expected
generally to reduce the potential dilution to the Company’s common
stock upon any conversion of the Notes and/or offset any cash
payments the Company is required to make in excess of the principal
amount of converted Notes, as the case may be, with such reduction
and/or offset subject to a cap. If the initial purchasers exercise
their option to purchase additional Notes, the Company intends to
enter into additional capped call transactions with the Option
Counterparties.
The Company expects that, in connection with
establishing their initial hedges of the capped call transactions,
the Option Counterparties or their respective affiliates will enter
into various derivative transactions with respect to the Company’s
common stock and/or purchase shares of the Company’s common stock
concurrently with or shortly after the pricing of the Notes,
including with, or from, as the case may be, certain investors in
the Notes. In addition, the Option Counterparties or their
respective affiliates may modify their hedge positions by entering
into or unwinding various derivatives with respect to the Company’s
common stock and/or purchasing or selling the Company’s common
stock or other securities of the Company in secondary market
transactions following the pricing of the Notes and prior to the
maturity of the Notes (and are likely to do so during the 40
trading day period beginning on the 41st scheduled trading day
prior to the maturity date of the Notes, or, to the extent the
Company exercises the relevant election under the capped call
transactions, following any repurchase, redemption or conversion of
the Notes).
The share repurchases referenced above and the
actions of the Option Counterparties or their respective affiliates
could increase (or reduce the size of any decrease) the market
price of the Company’s common stock or the Notes, which could
affect the noteholders’ ability to convert the Notes and, to the
extent the activity occurs during any observation period related to
a conversion of the Notes, it could affect the number of shares of
common stock, if any, and value of the consideration that
noteholders will receive upon conversion of the Notes.
The Notes will only be offered to persons
reasonably believed to be qualified institutional buyers pursuant
to Rule 144A under the Securities Act. The offer and the sale of
the Notes and the shares of the Company’s common stock issuable
upon conversion of the Notes, if any, have not been, and will not
be, registered under the Securities Act or the securities laws of
any other jurisdiction, and unless so registered, may not be
offered or sold in the United States except pursuant to an
applicable exemption from such registration requirements.
This press release is neither an offer to sell
nor a solicitation of an offer to buy the Notes or the shares of
the Company’s common stock issuable upon conversion of the Notes,
if any, nor will there be any offer, solicitation or sale in any
jurisdiction in which such offer, solicitation or sale is
unlawful.
ABOUT ORMAT TECHNOLOGIES
With over five decades of experience, Ormat
Technologies, Inc. is a leading geothermal company and the only
vertically integrated company engaged in geothermal and recovered
energy generation (“REG”), with robust plans to accelerate
long-term growth in the energy storage market and to establish a
leading position in the U.S. energy storage market. The Company
owns, operates, designs, manufactures and sells geothermal and REG
power plants primarily based on the Ormat Energy Converter – a
power generation unit that converts low-, medium- and
high-temperature heat into electricity. The Company has engineered,
manufactured and constructed power plants, which it currently owns
or has installed for utilities and developers worldwide, totaling
approximately 3,200 MW of gross capacity. In addition, Ormat is
expanding its activity into energy storage services, solar
Photovoltaic (PV) and solar PV plus energy storage. Ormat’s current
total generating portfolio is 1.1 GW with 1,025 MW of geothermal
and solar generation portfolio that is spread globally in the U.S.,
Kenya, Guatemala, Indonesia, Honduras, and Guadeloupe, and an 88 MW
energy storage portfolio that is located in the U.S.
ORMAT’S SAFE HARBOR STATEMENT
Information provided in this press release may
contain statements relating to current expectations, estimates,
forecasts and projections about future events that are
"forward-looking statements" as defined in the Private Securities
Litigation Reform Act of 1995. All statements, other than
statements of historical facts, included in this press release that
address activities, events or developments that the Company expects
or anticipates will or may occur in the future, including such
matters as the terms of the proposed offering, expectations
regarding whether the Company will enter into the capped call
transactions, the effect of the capped call transactions, our
projections of annual revenues, expenses and debt service coverage
with respect to our debt securities, future capital expenditures,
business strategy, competitive strengths, goals, development or
operation of generation assets, market and industry developments
and the growth of our business and operations, are forward-looking
statements. When used in this press release, the words “may”,
“will”, “could”, “should”, “expects”, “plans”, “anticipates”,
“believes”, “estimates”, “predicts”, “projects”, “potential”, or
“contemplate” or the negative of these terms or other comparable
terminology are intended to identify forward-looking statements,
although not all forward-looking statements contain such words or
expressions. These forward-looking statements generally relate to
Ormat's plans, objectives and expectations for future operations
and are based upon its management's current estimates and
projections of future results or trends. Although the Company
believes that its plans and objectives reflected in or suggested by
these forward-looking statements are reasonable, the Company may
not achieve these plans or objectives. Actual future results may
differ materially from those projected as a result of certain risks
and uncertainties and other risks described under "Risk Factors" as
described in Ormat’s annual report on Form 10-K filed with the
Securities and Exchange Commission (“SEC”) on February 25, 2022,
and in Ormat’s subsequent quarterly reports on Form 10-Q and annual
reports on Form 10-K that are filed from time to time with the
SEC.
These forward-looking statements are made only
as of the date hereof, and, except as legally required, the Company
undertakes no obligation to update or revise the forward-looking
statements, whether as a result of new information, future events
or otherwise.
Ormat
Technologies Contact:Smadar LaviVP Head of IR and ESG Planning
& Reporting 775-356-9029 (ext. 65726)slavi@ormat.com |
Investor
Relations Agency Contact:Sam Cohen or Joseph CaminitiAlpha IR
Group312-445-2870ORA@alpha-ir.com |
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