The Vancouver-based company said that this interest could increase up to 43.1% if an earlier deal in July pushes through. STOCKXPERT
Yesterday, Magma Energy Corp. announced that it has signed an agreement to acquire 32.32% of HS Orka, the largest privately owned energy company in Iceland, from Reykjavik Energy.
Canadian company Magma had been previously selected last August 17 as the preferred bidder in the deal. The deal involves 3.7 billion kroner (US $29.5 million) and an 8.7-billion kroner ($68.8 million) bond payable in a single installment for seven years with interest at 1.52% per annum. The bond will be secured by shares Magma acquired in this transaction.
The transaction comes after a deal signed by Magma last July to acquire a 10.8% stake in the Icelandic geothermal company with an option to take up another 5% share. If both transactions push through, Magma would hold a 43.1% stake in HS Orka and an option to invest $15 million in its expansion plans. In total, Magma can increase its stake up to 48.1%.
Subject to several closing conditions, including approval by the Toronto Stock Exchange, a waiver of preemptive rights, and negotiations about debt agreements with third parties of HS Orka, the transaction is expected to close in late September.
Ross Beaty, Magma's CEO, said, "We view this as a long term investment in HS Orka. We intend to work closely with all stakeholders to maximize HS Orka's value for all. The transaction provides HS Orka with a strong financial partner and provides Magma with exposure to Iceland's substantial geothermal resources and highly skilled domestic workforce.”
Magma was advised on the transaction by Glacier Partners, an investment advisory firm specializing in the geothermal and seafood industries
Magma Energy secures 32.32% stake in geothermal company HS Orka
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