It has been announced that a group of Icelandic pension funds have bought a 25% share of the portion of HS Orka owned by Magma Energy Sweden AB.
A press release from the company confirms that “a 25% stake in its 98.5%-owned Icelandic geothermal power company HS Orka hf to Jarðvarmi slhf, a company owned by a group of 14 Icelandic pension funds, for ISK 8.06 billion (approximately US $69.8 million).”
As the Grapevine reported in 2009 on Magma’s purchase of HS Orka at the time, “Magma Energy will pay ISK 3.6 billion to Reykjavík Energy upfront, with a remaining ISK 8.4 billion provided to Magma as a bullet loan from Reykjavík Energy, with the sole collateral being a bond in HS Orka reissued to Reykjavík Energy by Magma.”
Specifically, the Share Sale and Purchase Agreement entered into by Reykjavík Energy and Magma Energy Sweden AB, reads: “Payment of the Purchase Price shall be by: (i) wire transfer of ISK 3,616,988,813… and (ii) delivery to Arctica… of a bond issued by the Buyer in favour of the Seller… evidencing an aggregate indebtedness of an amount in USD equivalent to ISK 8,439,640,562 calculated using the mid rate for the USD/ISK exchange rate as posted on the Central Bank of Iceland’s website at 11:00 2 (two) business days prior to the Closing Date.”
Ross Beaty, Chairman and CEO of Alterra Power Corp, which owns Magma Energy, said, “I am very pleased to welcome these Icelandic pension funds into HS Orka as exceptional long term partners in its future. They will better enable development of the company’s outstanding growth prospects through their very strong financial condition and their intimate knowledge of Icelandic economic and social conditions.”
Beaty, as many of our readers are aware, used to be Chairman and CEO of Magma Energy. Earlier this year, this company merged with Plutonic Power Corp and subsequently changed their name to Alterra.