Alterra Power Corp announced that a group of Icelandic pension funds ("Jarðvarmi") that currently holds a 25% interest in HS Orka hf has delivered notice that it intends to increase its stake to 33.4% in accordance with the terms of the original purchase agreement entered into on 1 June, 2011, it was reported on 13 February.
Alterra Power's interest in HS Orka will be reduced from 75% to 66.6%. To effect the change in ownership, Jarovarmi will invest $38.5 million in HS Orka through the purchase of 878,205,943 treasury shares. This price represents a 15.6% increase over the original price paid by Jarovarmi for their initial 25% stake. These funds are expected to be used by HS Orka for the equity requirements for 80 MW of expansions which will increase the Reykjanes plant capacity from 100 MW to 180 MW.
Closing is expected to occur before the end of February. Alterra Power was advised on the transaction by MP Bank.
HS Orka is the largest privately owned energy company in Iceland, producing 9% of the country's power needs and 10% of the country's heating needs. Installed geothermal power capacity is 175 MW from the Svartsengi and Reykjanes power plants. In addition, HS Orka generates 150 MW of thermal energy for district heating. Expansions are planned that could increase HS Orka's geothermal power production capacity to 405 MW by 2016.
Alterra Power Corp is a leading global renewable energy company. It operates six power plants totaling 570 MW of capacity, including two geothermal facilities in Iceland, a geothermal plant in Nevada, British Columbia's largest run of river hydro facilities and the province's largest wind farm. The Company has an extensive portfolio of exploration and development projects, a skilled international team of explorers, builders and operators as well as the strong financial capacity to support our aggressive growth plans.
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