In an unpublished evaluation of the financial situation of Reykjavík Energy (OR) by Arion Bank, the company is said to be in such a difficult situation that it hinders new investments and payments to its owner, the City of Reykjavík.
The headquarters of Reykjavík Energy. Photo by Páll Stefánsson.
The evaluation reasons that OR’s situation will hardly improve in the near future unless new equity is provided or the Icelandic króna appreciates significantly, Morgunbladid reports.
The evaluation predicts that such a poor financial situation is bound to result in higher energy prices for public users in the long term.
“Explanations are required as to how the company is independently able to execute new investments and continued growth with increased leverage,” the evaluation states. “Plans on payments to owners are also incomprehensible in light of OR’s situation.”
“It seems as if OR will have its hands full with refinancing current loans, let alone new loans,” the evaluation continues.