Icelandic pension funds investigate HS Orka purchase

Iceland’s pension funds were given the opportunity to buy a quarter share in HS Orka from Canada’s Magma Energy. They have now decided to investigate the potential deal with a view to accepting it.

A statement from the pension funds says that the funds have all agreed together, along with Magma Energy, that the price for a quarter share in HS Orka will be around ISK 8 billion (EUR 49 million). The funds have entered a process of due diligence whereby they assess the company, the asking price and future projections.

8 billion is the same price that Magma paid for the 25 percent stake, RUV reports.

In addition to the 25 percent, Magma is apparently willing to sell the pension funds a further stake; which would bring their ownership up to a third of HS Orka. The minimum share the pension funds will hold is 22.5 percent. An investment decision is expected within a month.

The sale of HS Orka from Icelandic municipalities to a foreign energy giant has proven extremely controversial. As part of a pill-sweetening operation, Magma declared that it was willing to sell a portion of the company back into Icelandic hands. The offer was especially extended to the singer Bjork, who has been one of the most vocal opponents of the deal.

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