Reykjavik Energy in hot water

A far-reaching finance plan for embattled Reykjavik Energy will be presented at the company’s board meeting today.

The Reykjavik city council has been discussing granting the majority-public-owned company billions of kronur from a special fund in order to strengthen its operation, RUV reports.

The fund was just one of the items on the agenda at the city council cabinet’s emergency meeting about Reykjavik Energy. The meeting was adjourned and will continue today.

After the banking crisis in 2008, measures were taken to ensure that the City of Reykjavik held ISK 10-12 billion (EUR 61.5-73.8 million) in a special fund to stand by its responsibilities as Reykjavik Energy’s biggest shareholder. So far, the city has not needed to stand up to the plate, but the Reykjavik Energy board has been battling hard to maintain its overseas credit lines.

The Nordic Investment Bank, one of Reykjavik Energy’s biggest backers, took a stance against the company early this year when directors said they would not consider offering Reykjavik Energy a new loan. Later an offer was received to readjust interest rates on old loans with the condition that the company lay out ISK 8 billion up front. The offer has been discussed by the city council majority. According to RUV sources, the opposition has not been invited to take part in the discussions.

Reykjavik Energy’s annual report will be presented at the board meeting this afternoon along with information on what is to be done to protect the company’s fragile finances, a stock market statement says.

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