Magma Energy sells 25% stake in Icelandic HS Orka to local pension funds
Magma Energy Corp. announces its fully owned subsidiary Magma Energy Sweden has signed a term sheet to sell a 25% stake interest in the Icelandic geothermal power company HS Orka to a group of Icelandic pension funds. The deal is expected to close in May.
In a release this morning, “Magma Energy Corp. (TSX: MXY) announces that its wholly-owned subsidiary, Magma Energy Sweden AB has signed a term sheet to sell a 25% interest in its 98.5%-owned Icelandic geothermal power company HS Orka hf to a group of Icelandic pension funds.
The purchase price of ISK 8.06 billion (approximately US $71.5 million) is approximately equal to Magma’s original cost of acquisition. The pension funds will also hold an option until February 10, 2012 to purchase new shares from HS Orka treasury that, if exercised, would increase their stake in HS Orka to 33.4% at a cost of ISK 4.7 billion (approximately US $41.7 million).
Magma has also agreed to provide the pension funds with significant minority shareholder rights to appoint Board members and participate in the major decisions of HS Orka as long as they continue to hold at least a 22.5% interest. The transaction is subject to a number of conditions, including further due diligence, and is expected to close in May.”
Source: Company release via Magma Energy