Sale of new equity authorised

At a shareholders' meeting of Reykjavík Fibre Network (RFN; Ljósleiðarinn ehf.) today, the following proposal of the company's board of directors for a share capital increase was approved and it is related to the ongoing process of increasing equity as per earlier releases, dated October 22nd and May 2nd 2023. 

The shareholders' meeting agrees to increase the share capital in RFN of up to 3,249,999,513 new shares, each of which shall have a nominal value of ISK 1, or which corresponds to 33.33% of the company's share capital after the increase. The new shares shall belong to the same category of the company's share capital as its existing share capital, and the new shares shall be offered to investors for subscription.

It is also proposed at the shareholders' meeting to increase the share capital in RFN will be started on the basis of the assumptions and data that are currently available to the company's board, the board of OR and the previous records of the board and owners of OR. The final position on the offers will be taken at a shareholders' meeting after their comparison.

The company's board of directors shall determine the tender price and payment terms of the new shares and in what stages the authorization will be used. The current owner of 100% of RFN’s shares, OrkuveitaReykjavíkur (OR; Reykjavík Energy), waives its right of first refusal. 

The proceeds of the share capital increase will, in time, be used for the development of the company's operations and the payment of related debts. Authority of the board to increase the share capital of RFN will be included in the company's articles of association and will be valid until the end of 2024.

Assumptions reinforced

Since the owners of OR – The City of Reykjavík, The Township of Akranes, and The Municipality of Borgarbyggd – approved the share capital increase this spring, OR's board has been working to strengthen the assumptions of a careful and transparent sales process, that will be conducted by Arion Bank's corporate advisory. At a meeting of OR's board on May 31st 2023, the board of OR agreed that "...Arion Bank's advice will be followed to setup a closed sales process and the process should target long-term investors with public interest and parties that bring experience and knowledge beneficial for RFN. The aim will be for diversed ownership among prospective shareholders. The main goal of the sales process is raising the new equity at the highest possible price and in as open and transparent a manner as possible. The proposal will be presented to owner municipalities before a final decision is made." 

That presentation took place on June 15th last. and the CEO of OR will take a final position on the upcoming offers at the shareholders' meeting of RFN, having received a mandate from OR's BoD. 

Sævar Freyr Thráinsson

Mr. Thráinsson is the CEO of Reykjavík Energy, which now controls all RFN’s shares: 

"We believe that investors have faith in the strong and competitive company that Reykjavík Fibre Network is. We have seen investors’ interest in its Green Bonds and thus their faith in the company’s infrastructures, but with the solid underlying operations, RFN will in the future be able to pay yearly dividends to shareholders. Now we are looking for co-owners who are ready to take on the challenges of the future with us. We need to build a new national backhaul fibre-circle to enhance the country's electronic communication security and information security. The advent of 5G requires increased data transmission capacity, and we believe that RFN is a key player in ensuring healthy competition in the telecommunications market in this country. 

It is gratifying how broad the consensus has been among Reykjavík Energy’s owners and within OR's board of directors to expand RFN’s shareholder group with this share capital increase, thus creating an even more competitive company that can offer even more powerful fibre optic connections for Icelandic homes and businesses," says Sævar Freyr. He adds that OR's board has discussed the project in recent meetings, defining the rules of the tender so that they will be well thoroughly considered and determined in advance. 

Sales procedure in the new year

The appointment of a new CEO for RFN has recently been concluded and Mr. Einar Thórarinsson, an experienced manager from the software and technology sector, start at the company September 22nd. Iceland’s Competition Authority’s conclusion on RFN’s purchase of Sýn’s backhaul network is awaited and tendering and sales process of new equity is expected to conclude in 2024. 

Contact: 

Saevar Freyr Thráinsson 
CEO of Reykjavík Energy 
saevar.freyr.thrainsson@or.is 

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