Alterra Power finalizes sale of 25% in Icelandic HS Orka to local pension funds
Alterra Power (formerly Magma Energy) reports signing a share purchase agreement with Jardvarmi slhf, owned by a group of 14 Icelandic pension funds, on the sale of a 25% stake in Icelandic geothermal power company, HS Orka, decreasing its stake in the company.
Reported yesterday, “Alterra Power Corp. (TSX: AXY), (formerly Magma Energy) announces the signing by its wholly-owned subsidiary, Magma Energy Sweden AB (“Magma Sweden”), of a Share Purchase Agreement with Jarôvarmi slhf (“Jarôvarmi”), a company owned by a group of 14 Icelandic pension funds. This transaction was previously announced on April 18, 2011 and has now been formalized with the completion of a definitive Share Purchase Agreement. Under the terms of the agreement, Magma Sweden will sell a 25% interest in its 98.5%-owned Icelandic geothermal power company HS Orka hf to Jarôvarmi for ISK 8.06 billion (approximately US $69.8 million). The transaction is expected to close by June 2, 2011.
Magma Sweden was advised on the transaction by Saga Investment Bank based in Iceland.
Magma Sweden has also signed a Share Purchase Agreement with four Icelandic municipalities to purchase a 1.5% interest in HS Orka hf for ISK 475 million (approximately US$ 4.1 million). This transaction is expected to close by June 9, 2011.
Upon completion of the transactions, Magma Sweden will own a 75% interest in HS Orka and the remaining 25% will be owned by the Icelandic pension funds’ company Jarôvarmi.
Jarôvarmi will also hold an option until February 10, 2012 to purchase new shares from HS Orka treasury that, if exercised, would increase its stake in HS Orka by 8.4% at a cost of ISK 4.7 billion (approximately US $40.7 million). Assuming the option is exercised, Jarôvarmi would hold 33.4% of HS Orka. Jarôvarmi will hold significant minority shareholder rights to appoint Board members and participate in the major decisions of HS Orka as long as it continues to hold at least a 22.5% interest.”
Source: Company release via PR Newswire