Icelandic Pension Funds in Talks with Magma Energy Skip to content

Icelandic Pension Funds in Talks with Magma Energy

Discussions are taking place between the Canadian energy company Magma and a few pension funds on the funds’ acquisition of 25 to 40 percent of shares in HS Orka, an Icelandic energy company in which Magma holds a majority stake.

A power plant in Iceland. Photo by Páll Stefánsson.

Negotiations began in June. Ásgeir Margeirsson, CEO of Magma Energy in Iceland, told Fréttabladid that they are still in the early stages and some pension funds are more interested than others.

The fund Framtak, which is backed by 16 pension funds, was invited to buy a share in HS earlier this year but the fund’s executives thought the price tag was too high.

Disputes have surfaced because of Magma’s acquisition of HS. Subsequently Magma CEO Ross Beaty offered the Icelandic state a preemption right to buy shares in HS and to shorten the leasing period of the right to harness energy resources on Reykjanes peninsula.

Atli Gíslason, the representative of the Left-Green Movement on the Althingi parliament’s Industry Committee, said last weekend that the offer isn’t satisfactory and wants the country’s energy resources to be in public ownership without exceptions. Nationalization is an option in his view.

Bjarni Benediktsson, chairman of the Independence Party, said in an interview with Stöd 2 last weekend that he doesn’t believe that the majority of MPs will back the nationalization of HS Orka.

Benediktsson pointed out that the Left-Greens had fought the construction of an aluminum smelter in Helguvík on Reykjanes last year and were still trying to prevent its completion. “This is of course one way for the Left-Greens to prevent those plans,” he stated.

Margeirsson said the arguments of opponents of Magma’s acquisition of the majority of shares in HS strange, especially considering that pension funds have the opportunity to buy shares in the company.

“When people have, say a 35 percent stake in the company, they have considerable pull,” Margeirsson said, emphasizing that Magma is planning to always be a majority owner of HS.

Click here to read more about the debate surrounding Magma Energy.

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