Geysir Green to Increase Stake in Sudurnes Energy? Skip to content

Geysir Green to Increase Stake in Sudurnes Energy?

CEO of Geysir Green Energy (GGE) Ásgeir Margeirsson said GGE may increase its stake in Sudurnes Energy (HS) since the Competition Authority concluded yesterday that Reykjavík Energy (OR) cannot own more than three percent in HS.

According to the Competition Authority, if OR held a large stake in HS it would have restrictive impact on competition. Therefore, OR cannot own more than three percent in HS and must change its holdings in the energy company by October 1, 2008, Morgunbladid reports.

“The seriousness of this matter is that almost one third of shares in HS have an uncertain fate,” Margeirsson said, explaining that no public parties in Iceland can acquire OR’s stake because the state has sold its share as have all local authorities that held a share in the energy company, except for the Reykjanesbaer municipality.

Margeirsson also pointed out that private parties cannot hold a majority stake in HS since the law on operations of waterworks prevents such holdings. GGE is, however, interested in increasing its share in HS, Margeirsson said, although nothing has been decided yet.

“We also have to keep in mind that there is a preemption involved in all ownership changes within HS and it could happen that Reykjanesbaer or other owners want to use their preemptive rights. So this will never be solved without an agreement between the owners of HS,” Margeirsson added.

Minister of Industry Össur Skarphédinsson has submitted a bill on amendments to the laws on natural resources and public ownership of energy companies, which could enable companies like HS to separate its operations into a competitive branch and patent branch

Private companies cannot own more than one third of the latter type of branch, but there are no limitations to private ownership of the competitive branch of an energy company.

Margeirsson said GGE may be interested in further participation in competitive operations of HS once the legislative amendments have been incorporated, but emphasized that an agreement with other owners is a prerequisite.

In light of the Competition Authority’s decision that OR cannot own more than three percent in HS, the sale of the 15 percent stake that Hafnarfjardarbaer municipality held in HS to OR is in jeopardy.

The lawyer of Hafnarfjardarbaer said OR has been obligated to fulfill its agreement with Hafnarfjardarbaer—i.e., paying for its acquisition in HS—since March 10, but OR’s board believes the acquisition was automatically annulled since the bill of sale was never signed.

Click here to read more about the debate surrounding HS.

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