Verne Holding Ownership Structure Criticized Skip to content

Verne Holding Ownership Structure Criticized

The government has been criticized for supporting the construction of Verne Holding’s data center in Reykjanesbaer in southwest Iceland with Novator, a company owned by businessman Björgólfur Thor Björgólfsson, holding a 40 percent stake in the company.

Björgólfur Thor Björgólfsson. Photo by Geir Ólafsson.

Minister of Industry Katrín Júlíusdóttir told Morgunbladid that a new shareholder will be presented in the coming days which will lead to Novator’s share being reduced from 40 percent to 25 percent.

Júlíusdóttir said this had been one of the terms for her being willing to present a bill to the parliament on an agreement on the operation of the data center.

The bill includes discounts from public tariffs and a guarantee for a certain income tax percentage in the next 20 years, among other items.

The concession is estimated to be worth ISK 700 million (USD 5.5 million, EUR 3.8 million) of the ISK 90 billion (USD 701 million, EUR 489 million), which the project is expected to cost.

“When this matter landed on my desk last summer I asked myself the same questions which people are asking themselves now,” Júlíusdóttir said. “Should we let the entire investment go to waste because Björgólfur Thor submitted the initial capitalization or should we continue working on it so that it can deliver 200 jobs?”

“My conclusion was that I’d rather get the funding and water down Novator than to say to those who hold a 60 percent share against Novator and are planning to provide new funding that we don’t want them because in 2007 they worked with one of the alleged antagonists of the collapse,” the minister explained.

The American investment company General Catalyst holds 60 percent in Verne Holding. According to an oral agreement between the Icelandic government and General Catalyst, Björgólfsson won’t be able to increase his share in Verne Holding later on.

“Otherwise this investment agreement wouldn’t be made,” Júlíusdóttir stated, adding that it is assumed that Novator will eventually leave the project altogether.

When asked whether it wouldn’t have been better just to buy Björgólfsson’s share in Verne Holding straight away, the minister said that isn’t out of the question.

Björgólfsson was among majority owners in Landsbanki and is therefore connected with the infamous Icesave deposits, for which the Icelandic nation is now responsible, Fréttabladid reports.

Click here to read more about Verne Holding and other data center projects in Iceland.

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