Gazit Inc. Almost Doubles Stake in Ormat Industries

Gazit Inc., a Panamanian company controlled by Israeli businessman Chaim Katzman, almost doubled its stake in Ormat (ORMT) Industries Ltd. to 12.1 percent as Ormat expands its provision of geothermal power in the U.S.

Gazit bought 8.455 million shares of Yavneh, Israel-based Ormat, or about 7.1 percent of the company, for 47.91 shekels ($11.47) each on June 13, Gazit said in a statement today. That takes Gazit's stake in Ormat to 14.255 million shares, for a total investment of 688 million shekels.

Ormat is the No. 2 operator of geothermal power plants in the U.S., where almost half of states require electric power companies to increase their use of renewable power sources.

``Ormat is a player in the hottest sector there is,'' Yuval Zehira, an analyst at Tel Aviv-based Israel Brokerage & Investments Ltd., said in an e-mail. ``It has a clear strategy, a portfolio of power stations that already work, and people that don't stop creating new and unique products.''

Shares of Ormat fell 0.02 shekel, or less than 0.1 percent, to 49.38 shekels in Tel Aviv, after gaining almost 12 percent yesterday. Shares of Gazit rose 5 shekels, or 4.6 percent, to 113 shekels.

``We see our holdings in the company as a long-term investment, and part of our policy of widening our investments,'' Katzman said in an e-mail. ``We believe in the company and its management, and we believe in the alternative energy industry.'' He didn't say if Gazit, which began building the stake in the first quarter, would be buying more shares.

Shopping Malls, Housing

Gazit Inc., which trades in Tel Aviv, is the parent of Gazit-Globe Ltd. (GLOB), an Israeli real estate company. Gazit-Globe owns about 460 properties in the U.S., Canada, Europe and Israel. It focuses on malls and housing for the elderly.

``The investor is a surprise, but the investment isn't,'' Zehira said. ``The very fact of a huge investment of almost 700 million shekels in Ormat, when a company like Gazit has the possibility of investing in real estate, its main business, all over the world, shows that Ormat has hidden value.''

Beyond geothermal energy, Ormat's board in September approved a plan to spend about $13.5 million over the next five years on developing technology to turn plant oil into fuel and on new strains of feedstock to be converted. It will spend $35 million to $50 million to build a plant to make the oil.

``We welcome Gazit's investment in Ormat,'' Ormat Chief Executive Officer Dita Bronicki said in an e-mail.

To contact the reporter on this story: Alisa Odenheimer in Jerusalem at

To contact the editor responsible for this story: Malcolm Fried in Amsterdam at

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