As announced last 2 September, Skeljungur entered into exclusive negotiations with Sp/f Orkufelagið on the sale of all the shares in Skeljungur’s subsidiary in the Faroe Islands, P/F Magn, based on a received purchase offer. Last 31 October it was announced that reservations in the purchase offer made by Sp/f Orkufelagið regarding financing and the conclusions of due diligence had either been met or withdrawn. The announcement further disclosed that Skeljungur had agreed to participate in Sp/f Orkufelagið’s financing by re-investing up to 23% of the total selling price of the transaction in Sp/f Orkufelagið. It was also noted that further details of the financial impact of the transaction and Skeljungur’s involvement with Sp/f Orkufelagið would be provided at the time of finalisation of documentation regarding the sale.
A purchase agreement on the transaction has now been signed and the finalisation of other related documentation has been concluded. Skeljungur will re-invest 23% of the total selling price of the transaction in Sp/f Orkufelagið, i.e. 2,823 million ISK (141 million DKK, based on the exchange rate DKK/ISK 20). Skeljungur will thereby acquire a 48.3% share in Sp/f Orkufelagið through a listing of new shares in the company in the total amount of 2,441 million ISK (122 million DKK), in addition to loans in relation to the transactions in the amount of 382 million ISK (19 million DKK).
Skeljungur’s investment will be categorised as a share in an associated company when all reservations have been lifted and conveyance has been completed. This means that Skeljungur will enter a 48.3% share in the financial results of Orkufelagið in its income statement.
According to the above, the estimated impact of the transaction on Skeljungur’s balance sheet, based on the interim financial statement of last 30 September, is that net interest-bearing debt is reduced by 2.1 billion ISK, cash increases by 7.2 billion ISK and equity increases by approximately 6 billion ISK.
However, all of the above remains subject to the approval of the Competition Authority in the Faroe Islands, which is the sole remaining reservation regarding the transaction. Up to the time of formal conveyance the operation of P/F Magn will remain included in Skeljungur’s consolidated accounts.
Sp/f Orkufelagið is a Faroese company staffed by employees with extensive experience of the energy and retail sector. Sp/f Orkufelagið has set itself the mission of becoming a leading company in all forms of energy operations in the Faroe Islands. Teitur Poulsen is the chairman of the board of directors of Sp/f Orkufelagið.
For further information, please contact Árni Pétur Jónsson, Skeljungur CEO, firstname.lastname@example.org