Reykjavik Energy is in the midst of huge reorganisation and future planning. The projects underway are expensive and it is expected that ISK 17 billion (USD 135.5 million) will be needed in financing this year.
Eirikur Hjalmarsson, Reykjavik Energy Public Relations officer, told RUV that the loans are necessary because of the severe financing crisis that caused a near total drying up of funds a year ago which have the potential to slow down or stop projects.
It was therefore decided to look for loans on the domestic short-term market and a short term loan of ISK 5.5 billion since the banking collapse has been secured, but the terms are not considered sustainable. Hjalmarsson says that before the collapse Reykjavik Energy was always able to finance its projects with cheaper foreign loans.
The use of domestic short-term loans is much more than initially predicted, so financing decisions are being made directly by the board.
Aja!! Magma will be soon getting a big share in the company in exchange of loan. As I said before soon ALL of the local energy companies will be own by Magma and prices will go up for everyone. :(
The solution is nationalisation and the Icelandic state to raise loans internationally more cheaply than Icelandic private companies can.
@JIM
I totally agree. I is just sad that too many don´t understand how this can be done very wicely.