Innergex Renewable Energy Inc. on May 23 announced it completed the sale of its Magma Energy Sweden AB subsidiary to Jarðvarmi for about C$402.2 million.
Magma Energy owns a 53.9% equity interest in HS Orka hf., which owns two operating geothermal facilities totaling 174 MW in Iceland. HS Orka also owns the under-construction Brúarvirkjun run-of-river hydro project, a number of prospective renewable power projects and a 30% equity interest in the Blue Lagoon Geothermal Spa and Resort in Iceland. Jarðvarmi, an existing shareholder in HS Orka, is owned by a group of Icelandic pension funds.
The transaction was completed after Jarðvarmi exercised its right of first refusal regarding the sale. As a result, Alterra Power Corp. terminated a share purchase agreement with Macquarie Infrastructure and Real Assets for the sale of Magma Energy.
The sale price represents a premium over the carrying value of the assets, which was approximately C$336 million as of March 31.
Innergex will use net proceeds from the sale to reimburse the C$228 million, one-year credit facility contracted in October 2018 and the utilized portion of the additional borrowing capacity of C$100 million that was obtained in April 2019. The proceeds will also be used to deleverage corporate facilities. The excess cash available to Innergex will improve by over C$170 million and will be accessible to fund future growth projects.
BMO Capital Markets and Stöplar Advisory are acting as financial advisors and McCarthy Tétrault LLP is acting as legal counsel to Innergex.