Magma may sell up to 25 pct of Iceland energy co.

Tue Nov 16, 2010 2:25pm EST

* Wants investor to help neutralize "political noise"

* Looks to break even on sale

* Reports fiscal Q1 EPS $0.05; Q1 revenue $8 mln

(Amounts in US dollars unless noted)

VANCOUVER, British Columbia, Nov 16 (Reuters) - Magma Energy Corp MXY.TO, which was embroiled in a dispute this year with singer Bjork over an Icelandic purchase, may sell up to 25 percent of the contentious asset to a local investor, the geothermal energy company said on Tuesday.

Magma, the only private energy company in Iceland, is not seeking to make a profit on the sale but is more interested in getting the right type of investor on board, Chief Executive Ross Beaty said.

"The principle we're are going in on in this discussion is to divest a minority stake, meaning 10 or 20 or 25 percent," Beaty said on a conference call.

The company is looking to sell "something in that range to a good investor, who will be good not just for us but for Iceland and good to neutralize some of this political noise that has developed over time, to help the government in its objectives," he said.

Icelandic singer Bjork, known for her political activism, tried in July to get the country's parliament to halt the planned sale of HS Orka to Magma, a Canadian-based geothermal energy and producer.

She said Icelanders should be allowed to decide through a referendum whether access to the country's natural resources should be privatized.

An Icelandic government committee found in September that Magma's acquisition of a 98.53 percent stake in HS Orka complied with the country's laws.

"Our principle will be that we seek neither to make a profit on a transaction nor a loss," Beaty said.

The sale will help to fund Magma's acquisition of HS Orka, which cost around $250 million before debt.

Earlier on Tuesday Canada's biggest listed geothermal company reported earnings of $13.4 million, or 5 cents a share, in its first quarter ended Sept. 30. Revenue came in at $8 million.

Magma's shares were down 2 Canadian cents at C$1.36 on the Toronto Stock Exchange.

($1 = $1.02 Canadian)

(Reporting by Nicole Mordant; Editing by Frank McGurty)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.