Saga Capital Investment Bank Iceland

Nordurorka, the main provider of electricity and geothermal water for heating in the north of Iceland, has with the mediation of Saga Capital Investment Bank, agreed to sell its 32% shareholding in the limited geothermal company Theistareykir ehf. to Landsvirkjun.

After the purchase, Landsvirkjun, a state-owned energy company, will own a 64% shareholding in Theistareykir ehf. Other shareholders in the company are Orkuveita Husavikur and Thingeyjarsveit municipality. The price to be paid for the shareholding, once due diligence is completed, will be USD 4.5m. An additional USD 11m will be paid when energy production begins in Theistareykir’s operating area, although this amount will not fall due until 10 years later. Saga Capital's Corporate Finance was responsible for brokering the sale as a consultancy service provider and representative of Nordurorka.

Theistareykir ehf. has been involved in investigations into the potential utilisation of the geothermal area at Theistareykir since 2001. As a result, the company has invested extensively. Six deep test boreholes have been drilled on three drill sites in the eastern part of the area with good results. In total, the boreholes have an electricity production capacity equivalent to approximately 45 megawatts.There are indications that the area has considerably greater capacity, given that the geothermal area at Theistareykir is considered to be one of the larger geothermal systems in Iceland.