An analyst snagged national headlines Thursday by suggesting China might buy Hurtigruten in the wake of the company’s COVID-19 scandal in an effort to further the country’s goal of establishing a major presence in Svalbard. Such a presence, along with that of countries like Russia, has for years been among Norway’s top security worries – but is the columnist offering a legitimate scenario or merely clickbait?
On one hand, we’ve been here before with China and large purchases in recent years, and it ended up being it ended up being something of a joke. On the other, another author who’s a foremost expert on Svalbard and Arctic conflicts declares “Hurtigruten will be sold, sooner or later” – although he suggests Russia might be the country more ideally suited to make a Svalbard power play.

The latest stir about Hurtigruten and/or the “New Cold War” for the Arctic was sparked when Arne Totland, author of a book that translates in English to “Cold Front: The conflict areas in Svalbard through 100 years,” wrote two similar columns published by NRK and Svalbardposten with the theme “China wants to tighten its grip on Svalbard.” In the NRK article, he notes the immense financial problems Hurtigruten is having due to the pandemic, plus the impact of an outbreak aboard multiple ships where precautionary and notification requirements were violated – most notably during two weeklong voyages in Svalbard in July.
“The (parent company) has more than 13 billion kroner in debt, negative equity and a market from which the bottom has fallen out,” Totland wrote. “In addition, the company has inflicted on itself the biggest reputation disaster in Norwegian business in a long time.”
Parent company Hurtigruten Group is mostly owned by the London-based acquisition fund TDR Capital, which acquired the company in 2014, he notes, adding “the average investment horizon for such a fund is five to seven years. The time for an exit should therefore be approaching.”

“Today, almost only the Chinese buy chickens in rainy weather,” Totland wrote. “In the case of Hurtigruten, they see what can accompany the purchase. Not just a fleet of modern ships and a unique position along the Norwegian coast. They will also, as if by magic, control Svalbard’s largest company and the crank in Norway’s investment in Svalbard, tourism, together with a large part of the property stock in Longyearbyen.”
Michael Wenger, in an analysis for China’s Polar Journal of Totland’s columns, noted purchasing Hurtigruten would give China a considerable boost in its efforts to “build a mainstay at the western end of its (new) Silk Road.”
“For years, the Chinese government has been pursuing a charm offensive against Arctic states in order to realize its plan for a ‘new, polar Silk Road,” Wenger wrote. “Huge investments are being made in infrastructure and support projects. In addition, Chinese leasing companies have already leased three of the Hurtigruten ships, as reported on NRK. In addition, Hurtigruten had made great investments and effort in recent years in order to present itself on the Chinese market.”
The obvious questions with such a scenario:
• Is the sale of Hurtigurten feasible in the foreseeable future?
• What international entities seen as potentially adversarial to Norway’s interests might be a serious bidder – and will Norway’s government invalidate any such bids?

An analysis in February by Arne Holm, editor of High North News, suggests Russia might be the “adverse” entity most interested in buying Hurtigruten to boost its Svalbard foothold (but that China indeed would be the most likely rival) and agrees with Totland’s assertion the timing for a sale is ripe.
“Both Vladimir Putin and the Chinese leaders have friends and sympathizers with money,” Holm wrote. “Friends with more than enough money to let the current British owners leave Svalbard so that they themselves can enter this Arctic jewel.”
Holm’s analysis, of course, does not factor in the peril the COVID-19 pandemic has inflicted on Hurtigruten’s finances and reputation. An analysis in May of Hurtigruten’s financial health in the wake of the pandemic by Gard L. Michalsen, a journalist for the Norwegian businesses news agency E24, stated there are in-country discussions by Hurtigruten, private industry and the government about the company’s future prospects – as indeed is happening with all industries and companies affected by the outbreak.
“Should the shipping company go bankrupt in the worst case, there are few players ready to take over in the short term,” Michalsen wrote. “The (shipping) competitor Havila Kystruten, which will take over four of the Norwegian Hurtigruten routes beginning in 2021, had more than enough to get ready for itself before the crisis.

However, “in the longer term, Hurtigruten is dependent on the state providing liquidity through crisis loans,” he noted. A letter from the company and Norwegian Seamen’s Association to the government proposes three alternatives involving credit, loans and other assistance, and that it may be the government’s perception of how vital the company’s owners are that decides the company’s fate.
“They cannot treat this as a pure financial crisis,” Michalsen wrote.
Establishing a price for Hurtigruten is difficult since the company is not listed on a stock exchange, he stated. One estimate states Hurtigruten was worth 16 billion kroner based on its 2018 annual profit, but figures for 2019 and beyond are not known yet.
“That is a lot of money, even for an oil nation and for a government that does not want to run a business,” Michaelsen wrote.
However, the Norwegian government showed a willingness to intervene to a lesser extent in 2016 when it purchased one of two privately owned land tracts in Svalbard, a 218-square-kilometer tract across the bay from Longyearbyen known as Austre Adventfjord, for 300 million kroner. The purchase occurred two years after a company owned by a family in Bergen announced the property would be sold to the highest bidder, which immediately triggered speculation China or another “hostile” foreign entity might try to purchase it for the estimated 20 million tons of coal within in the mountainous tract or for other purposes in addition to gaining a sizeable strategic foothold.

Media hype about the potential sale reach peak hype – and quickly thereafter comedic value – when reports soon after the planned sale declared a Chinese tycoon wanting to develop the area as a resort had made an initial bid 656 million kroner. That was quickly debunked, with the supposed price deemed absurd and the tycoon exposed as someone who knew virtually nothing about Svalbard as he admitted he didn’t realize the archipelago was largely covered by ice.
Periodic media reports occurred during the next two years about a sale being imminent, but without one actually taking place. The actual purchase by the government came with no advance hint a deal was in the works – and was quickly criticized by many who said the government was essentially bamboozled into paying an inflated price by the largely non-existent possibility of a foreign acquisition.
“The government’s purchase of the Austre Adventfjord property in Svalbard only underscores the government mess in the archipelago,” Totland said at the time.
Among other “safeguards” mentioned by media and analysts during the two years leading up to the sale was a clause attached to the property’s mortgage agreement in the 1930s that requires the Norwegian government’s approval if the property is sold to a foreign entity. Also, while potential bidders might see riches in the coal at the site, the new owner would have to cope with major mineral rights and environmental issues that has already been going on for many years.
Totland, in the conclusion of his NRK article, argues that whatever the price is for Norway – in terms of an actual bid or financial support allowing a Norwegian company to purchase it – it must be paid to acquire Hurtigruten if an open sale to an adverse foreign entity becomes a realistic possibility.
“Whatever the solution, the Norwegian authorities must be ready to intervene financially,” he wrote. “To avoid undermining Norway’s sovereignty over Svalbard, the Norwegian authorities must prevent foreign states’ politically motivated acquisitions of companies.”