Ormat is clearing house, and today announced the sale of its holdings in the Kazakh power company KHC for $6.1 million.
KHC owns two coal-fueled power stations and an electricity network in Kazakhstan, central Asia. Ormat has stated that the power stations are old-fashioned and that they serve a population of 200,000 poverty-stricken households.
In its second-quarter financial statement, Ormat had registered KHC as a ceased activity. It is selling the holdings to an English company, in stages.
At the first stage, the buyer will be paying $3 million, augmented by $2.8 million in instalments until year-end 2002. another $300,000 will be payable on March 16, 2003.
Ormat said the deal will not substantially affect its results.
In March 2002, Ormat acquired control over KHC from its partner, International Power, paying half a million dollars plus $2.5 million worth of commitments by KHC for the 50% stake.
KHC's contribution to Ormat's results had not been substantial, especially as power prices are regulated by the Kazakh government. Price rises lagged far behind the climbing cost of raw materials, and the Kazakh law prohibited the company from denying service to nonpaying customers. Annual sales were $30 million, but profits were low.