Reykjavík Energy, Reykjavík’s public electricity utility, will sell its holding in Reykjavík Energy Invest. However, there is contention within the Reykjavík city council about when and how the shares should be sold.
The merger of the energy companies Geysir Green Energy and Reykjavík Energy Invest (REI), a subsidiary of the public company Reykjavík Energy, has generated fierce debate within the Independence Party, the ruling party on Reykjavík’s City Council, about the role of Reykjavík Energy.
Yesterday, Independence Party representatives on Reykjavík’s City Council reached an agreement that Reykjavík Energy should sell its holdings in REI as soon as possible since it’s not the role of a public company to engage in entrepreneurial investment. Quoted by Morgunbladid daily, the council member from the Progressive Party, the junior party in the ruling coalition on the city council, argues that only a small portion of the shares should be sold now. According to Morgunbladid, Geysir Green Energy has the right of first refusal for these shares, but other investors have declared their interest as well.
Vilhjálmur Vilhjálmsson, the mayor of Reykjavík, seems to have given into the demands of his fellow council members in the Independence Party because last week he maintained that Reykjavík Energy should sell its shares in REI in two or three years, when the value of the company would have increased dramatically. Their opposition to the merger and the way it was presented is believed to have soured the relationship between the mayor and his colleagues.