14 Icelandic pension funds have struck a deal to buy 25 percent of energy company HS Orka. The chairman of Jardvarmi — a company specially set up by the pension funds for this deal — says that no future major decisions will be taken at HS Orka without the pension funds’ approval.
The contract states that Jardvarmi will buy the 25 percent stake from Alterra Power (formerly Magma Energy), for around ISK 8 billion (EUR 48.3 million), at 4.63 per share (ed. presumably ISK 4.63). Jardvarmi will also be greenlighted to own up to 50 percent of HS Orka by buying more shares as they are put on the market in the future.
Olafur Sigurdsson, CEO of the Stafa pension fund and chairman of Jardvarmi, says that the company is well-run and that the asking price is fair.
“This is the first time that we have made a bid to invest in the energy sector: it is a conscious risk spreading strategy to diversify into another industrial sector, and it is also the sort of long-term investment option which the pension funds are looking for,” Sigurdsson told RUV.
The purchase contract contains a specific minority clause, which means that the pension funds will play an active role in running HS Orka, despite being minority shareholders.
Canada’s Magma Energy caused a political storm by setting up a subsidiary in Sweden in order to buy HS Orka and avoid the Icelandic law prohibiting non-EEA ownership of the country’s energy resources. The purchase sparked heated debate in Iceland about foreign ownership of energy resources — and about privatised ownership in general. The purchase was found to be legal, but Magma Energy still offered to sell part of the company back into Icelandic hands; ostensibly as a good-faith measure.