Shares in Digital 9 Infrastructure PLC (LSE:DGI9) wobbled further as the “significant likelihood” of an eruption of an Icelandic volcano cast some volcanic clouds over the planned sale of its stake in data centre specialist Verne Global, which includes operations in Iceland.
The trust's manager, Triple Point, said earthquake activity in the Sundhnúkar area "poses little to no risk" to Verne facilities and operations.
With more than 1,000 earthquakes in the past two days, followed by a decrease in earthquake activity, the Icelandic Meteorological Office said this could suggest magma has reached very close to the earth’s surface before a potential eruption of Fagradalsfjall volcano.
The meteorological office said there is a “significant likelihood” that an eruption will occur somewhere along the 15-kilometer (9-mile) magma tunnel, with the “prime location” an area north of Grindavik near the Hagafell mountain.
Grindavik, which has been evacuated, is around 20km south of Verne Global Iceland.
Triple Point has indicated that operations at Verne Global have been unaffected by the Fagradalsfjall volcano and that it will "continue with our transaction activity as planned".
Digital 9 and Triple Point, which have been criticised over the sale by 3.5% investor Aqua Ventures Ltd (AVL), which called for a strategic review, said last month that pursuing a full sale rather than 'syndicating' part of its stake to another investor will enable the trust to "accelerate its balance sheet deleveraging, deliver the cash resources necessary for the company and group to strengthen their position, and further maximise shareholder value".
Analysts at Stifel said the timing of the potential volcanic eruption event is "clearly unhelpful given the fund is in the process of selling the asset (outright or majority) and the need to meaningfully de-lever the balance sheet".
The Verne investments made up 42% of the D9 portfolio as of end June.
Stifel said: "There is a risk that any buyer may pause to see how the situation develops before closing. Given the issues at the fund, it is a hurdle that is unwelcome and although we still expect a sale in the weeks ahead, it does increase the overall risk profile of the company."