Reykjavik Energy is selling its share in HS Energy to Magma Energy for 30% down and the rest through a loan from itself with one payment which is seven years away. The interest rates are 1.5% and the collateral is … wait for it, the shares in HS Energy.
Is everyone munching crazy pills or haven’t we learned a thing?
These sort of financial shenanigans were what brought Iceland to its knees. This seems like the perfect opportunity for Magma to strip HS Energy of valuables and return a broken shell to the owners of Reykjavik Energy (the taxpayers) in seven years time.
I am familiar with someone whose wealth has been built upon micro-economic crisis’. He keeps an eye and an ear out for landowners, property owners and stockholders in trouble, personal or financial and lures their assets away when they are at their weakest for a fraction of the real value. Ross Beaty and whoever is with him behind this deal is the performing the same trick, albeit on a larger scale with the help of our desperate politicians.
Sigrun Elsa Smaradottir of the Social Democrats thinks there is reason to believe that the whole deal might actually cost Reykjavik Energy 5-6 billion ISK instead of leaving behind a profit.
Foreign investment should be welcome but it should entail actually bringing money into the country and full disclosure of who is behind the wheel. Otherwise, we are allowed to be suspicious of organized shenanigans behind the scenes, be they illegal to the letter or not.
Oh, and a bike club in Iceland has just become member of Hells Angels.