Magma Energy Corp. (TSX:MXY) increased its stake in the Icelandic geothermal power plant operated by HS Orka on Tuesday despite continuing calls from within the island nation to block the acquisition.
The Vancouver-based company’s subsidiary, Magma Sweden, bought 38.03% of HS Orka from a privately-owned energy company called Geysir Green Energy ehf and now holds 84.21%.
The plant produces 175 megawatts of power, or approximately 9% of Iceland’s needs.
Magma announced the deal in May that would see it eventually own 98.53% of the company through a series of staged payments.
Tensions have flared in recent weeks following the Icelandic government’s decision to investigate the deal. (See “Icelanders steamed over Vancouver firm’s push to land geothermal producer” – issue 1085; August 10-16, 2010)
Magma acknowledged the delicate situation Tuesday in the form of a cautionary note attached to the acquisition news.
“The government of Iceland may take actions to invalidate or wind-down Magma Sweden’s acquisition of a further interest in HS Orka … the government of Iceland may pass legislation or constitutional amendments to nationalize or restrict private or foreign ownership in Iceland’s energy sector,” the company said.
At press time, Magma’s shares were down $0.01 to $1.17.