GGE’s Value Overestimated? Skip to content

GGE’s Value Overestimated?

Júlíus Vífill Ingvarsson, councilman for Reykjavík City and a board member of Reykjavík Energy (OR), claims the appraisal of Geysir Green Energy (GGE) was overestimated by ISK 6.7 billion (USD 113 million, EUR 78 million) in the merger agreement with Reykjavík Energy Invest (REI).

“According to OR’s CEO [Hjörleifur B. Kvaran], GGE was overestimated, because there is a huge difference between its recorded value and its value as stated in the agreement,” Ingvarsson told Morgunbladid.

Ingvarsson is referring to information written on a memo on the appraisal of GGE at the time when the merger with REI was agreed upon, which Kvaran submitted at his request during an OR board meeting last weekend.

“People thought they were making some great business deal on behalf of OR by having immaterial assets estimated at ISK 10 billion [USD 169 million, EUR 117 million] in the merger agreement between REI and GGE, but by taking a closer look it becomes clear that only half the story has been told,” Ingvarsson continued.

“It is perfectly clear that the agreement made was quite favorable for GGE,” Ingvarsson stated. “Considering that one is bound to assume that those who were responsible for making the agreement on behalf of OR had entered a battlefield they knew little about.”

Kvaran said in his memo that the disparity in value should have been submitted to the OR board meeting on October 3 when the REI-GGE merger was accepted.

Ingvarsson claimed the OR board would not have accepted the merger agreement during that meeting if they had known about the alleged overestimation of GGE’s value.

“Not at all. This information tells us that the agreement was not as lucrative for OR as it was made out to be,” Ingvarsson concluded.

Click here to read more about the controversial REI-GGE merger.

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