The town of Reykjanesbær sold its shares in Alterra Power (formerly Magma Energy) to a private investment company, with the proceeds being used to pay off the town’s debts.
As many may recall, the company that was then known as Magma Energy signed a 65-year contract with the town of Reykjanesbær to conduct geothermal exploration in the area (with renewal options for another 65) in 2010. Part of this deal involved the town having a stake in the company. Reykjanesbær is in a region of Iceland with the highest unemployment rates in the country, and many city officials saw the deal as a boon to their flagging economy.
Vísir now reports that the town has opted to sell their shares in Alterra to the investment group Fagfjárfestasjóðurinn ORK for about 6.3 billion ISK. Fagfjárfestasjóðurinn ORK is run by another investment group, Rekstrarfélagi Virðingar hf, and is funded by investors and pension funds.
The town intends to use the proceeds to pay off foreign debts, first of all. The remainder will be used to pay off some short-term loans and other debts.