UPDATE 1-Magma to buy GGE’s stake in HS Orka for $84.5 mln

* To hold 98.5 pct of HS Orka post deal

* To pay GGE $84.5 mln in stock and cash

* To assume $36 mln bond

May 17 (BestGrowthStock) – Magma Energy Corp (MXY.TO: ) said it
agreed to purchase Iceland’s Geysir Green Energy ehf’s (GGE)
stake in HS Orka hf in a cash-and-stock deal valued more than
$84.5 million, to take near-total control of the geothermal
company.

Magma said its unit would purchase GGE’s remaining stake in
HS Orka and also assume a $36 million bond issued by GGE.

Magma said the deal, expected to close in late July, would
increase its geothermal power production to 186 megawatts (MW)
and geothermal reserves to 193 MW.

The company said it may elect to pay $26.6 million in
common shares, based on the trading price of its shares in late
July, and the remaining cash component in two tranches of $45.5
million and $12.5 million.

“The company plans to finance this transaction by: bridge
financing, conventional debt and/or equity financing, and/or
sale of a minority stake in HS Orka to other Icelandic or
offshore investors,” it said in a statement.

Shares of the company closed at C$1.47 Friday on the
Toronto Stock Exchange.

Stock Market Trading

(Reporting by Ashutosh Joshi in Bangalore; Editing by Aradhana
Aravindan)

UPDATE 1-Magma to buy GGE’s stake in HS Orka for $84.5 mln