Alterra Power Corp subsidiary Magma Energy Sweden will sell 25% interest in Icelandic geothermal power company HS Orka to Jarôvarmi for $69.8m.

The transaction which was announced on 18 April 2011 has now been formalized with the completion of the share purchase agreement.

Under a separate share purchase agreement signed between Magma Sweden and four Icelandic municipalities, Magma Sweden will acquire 1.5% stake in HS Orka for $ 4.1m.

The deal will close by 9 June 2011.

Upon completion of the transactions, Magma Sweden will own a 75% interest in HS Orka and the remaining 25% will be owned by Jarôvarmi.

Magma Energy Sweden owns 98.5% stake in geothermal power company while Jarôvarmi is owned by 14 Icelandic pension funds.

Jarôvarmi will also hold an option until February 10, 2012 to purchase new shares from HS Orka which will increase its interest stake in HS Orka by 8.4% at a cost of $40.7m.

If the option is exercised, Jarôvarmi would hold 33.4% of HS Orka.