Vancouver-headquartered Magma Energy Corp. (TSX:MXY) plans to increase its stake in an Icelandic geothermal company for approximately US$29.5 million.
Magma has signed an agreement to acquire 32.32% of HS Orka hf from Reykjavik Energy and two Orka shareholders and acquire a bond worth US68.8 million payable in a single installment in seven years and an annual interest of 1.52%.
The agreement is expected to close in late September, subject to several closing conditions including TSX approval and a waiver of pre-emptive rights held by Orka's third party shareholders.
The deal follows a previous agreement made July 23 where Magma agreed to acquire a 10.78% stake in HS Orka. If both transactions conclude, Magma would hold a 43.1% interest in Orka. Magma also as an additional option to invest US$15 million in Orka's expansion plans, which would increase its stake to 48.1%.
Magma's share price range during the past week: between $1.90 and $1.95; 52-week high: $2.10; 52-week low: $1.41.