0
0
Store Norske is breathing a sigh of relief after getting its bailout by a nearly unanimous vote in Parliament. But the decision intended to keep the company alive at least through next year is also upsetting many people, including private shareholders being forced to give up their holdings at what some say is a shocking low price.
Approval of 500-million-kroner bailout was expected, but the 96-3 vote was notable because lone Green Party member Rasmus Hansson was among those voting in favor despite the party’s repeated call for an end to all mining in Svalbard.
“It would obviously be totally irresponsible to the employees and the Svalbard community to let Store Norske go bankrupt almost overnight,” he said during the parliamentary debate. “The employees, the company, the Svalbard community and Norway need some time to plan for Norway’s presence in Svalbard after coal mining.”
The three members of the Socialist Left Party, which has also long sought an end to mining in Svalbard, voted against the bailout.
The government, which owns 99.9 percent of Store Norske, will provide the company with a 205-million-kroner loan and pay 295 million kroner for the company’s real estate holdings. The company is nearly bankrupt after a record loss of 537 million kroner last year due primarily to low coal prices and still faces an uncertain future, with officials saying they will decide next spring if prices are recovering enough to continuing mining beyond 2016.
The bailout came only days after Parliament voted to rid Norway’s oil wealth fund of investments in mining and power companies that generate more than 30 percent of their output or revenue from coal. That – plus the fact oil is Norway’s dominant source of revenue – has triggered a flurry of national and international accusations of hypocrisy.
“Do not be surprised (next year) if still-low coal prices trigger demands for more oil money to rescue coal,” wrote Jan-Arild Snoen, a Conservative Party member, in a column in Aftenposten disagreeing with his party’s approval of the bailout. “And if the answer is no, the blue government in the meantime wasted hundreds of millions because it is unable to cut through and exit an unprofitable relic.”
Also unhappy are many of Store Norske’s private shareholders who, while owning a minuscule percentage of the company, don’t want to relinquish their shares. The bailout includes spending 385,000 kroner to acquire outstanding shares government will acquire all outstanding stock 1,945 kroner a share.
“I’m actually shocked at the low price,” said Arnt Årnes, who through a company owns 20 shares he wants to keep largely for sentimental reasons, in an interview with Svalbardposten. “I’m terribly against it.”
