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Sale of HS Orka majority stake of Alterra Power not going through

Reykjanes geothermal power plant of HS Orka, Iceland (source: flickr/ ThinkGeoEnergy, creative commons)
Alexander Richter 23 Jan 2013

Discussions about a sale of a 66.6 percent majority stake of Canadian Alterra Power in Icelandic HS Orka to a group of Icelandic investors close without results.

Icelandic paper Frettabladid reports this morning that the discussions about a possible acquisition of a 66.6 percent stake in HS Orka by an Icelandic group of investors from Canadian Alterra Power have closed without results.

This would have been a major business for Iceland and Alterra Power. The Icelandic group, consisting of Modum Energy and Stefnir, a fund company by Icelandic bank Arion Banki, handed in an offer in the summer of 2012 hoping to have closed a deal by the same fall.

Now discussions ended with no success. This deal would have been valued at about ISK 28 billion ($212 million).

The plan was to list HS Orka on the Icelandic Stock Exchange.

While no reasons are given, it should be very obvious that the current currency restrictions in place and managed by the Icelandic Central Bank have made this deal not possible.

Under those rules, foreign currency restrictions are in place that hinder any flows of foreign currency out of the country in order to help support the position of the local currency, the Icelandic Krona.

Source: Frettabladid