Iceland to probe geothermal sale to Canada's Magma

REYKJAVIK, July 27 (Reuters) - Iceland said on Tuesday it was opening an investigation into the legality of the planned sale of a stake in HS Orka, a local geothermal company, to Canada's Magma Energy Corp MXY.TO.

The Economics Ministry said in a statement it had informed both parties of the probe after receiving a complaint about the deal, though the source of the complaint was not specified.

Also on Tuesday, Magma said it had closed a stock offering that raised C$45 million ($43.6 million) to fund its purchase of the stake from Iceland's Geysir Energy ehf, raising slightly more than it had targeted. [ID:nN27183935]

But the deal, which would give Magma near-total control of HS Orka, has run into political opposition. The Icelandic singer Bjork urged parliament this month to review the sale, saying it would harm Iceland's interests.

Iceland's government has begun to review laws surrounding the ownership of energy groups, which represent some of the island's most valuable resources. Iceland has been pressing to limit the scope of private interests in the sector.

Thermal energy, generated by the heat of its many volcanoes, is one of Iceland's most valuable natural resources and could attract much-needed foreign investment in the wake of the 2008 financial crisis. (Reporting by Omar Valdimarsson; Editing by Gary Hill)