Íslandsbanki to be State-Owned Skip to content

Íslandsbanki to be State-Owned

The creditors of Glitnir Bank have proposed to relinquish all of Glitnir’s holdings in Íslandsbanki LTD to the State as part of their stability contribution, RÚV reports. This, according to a statement from the Icelandic Ministry of Finance, published early this morning.

The proposal is an amendment to an offer made by the creditors on June 8 this year, regarding ways to complete the bank’s winding-up proceedings.

This new amendment would make the State a full owner of Íslandsbanki. The shares in question are all of Glitnir’s shares in ISB Holding ehf, which owns 95 percent of shares in Íslandsbanki LTD. The total equity of Íslandsbanki amounted to ISK 185 billion (USD 1.48 billion, EUR 1.30 billion) in June of this year.

The new amendment means that the following parts of the original proposal by creditors in June have been withdrawn: a profit-sharing agreement concerning returns on Íslandsbanki shares; a contingent bond in the amount of ISK 119 billion (USD 950 million, EUR 840 million); Íslandsbanki’s foreign-denominated dividend payment to Glitnir, in the amount of ISK 16 billion, and other planned dividend payments.

The transfer of liquid assets, cash, and cash equivalents will be reduced by ISK 16 billion (USD 128 million, EUR 112 million) because of the proposed foreign-denominated dividend to Glitnir, which will not be paid, and ISK 36 billion (USD 290 million, EUR 250 million) due to other changes provided for in the amended proposal from the Glitnir creditors.

According to the statement from the Ministry of Finance, the Task Force for Capital Account Liberalization believes the measures “conform to the stability conditions as formulated and that, assuming the measures are carried out, the assessment of the Task Force is that the conditions for an exemption from the capital controls have been met.”

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