Íslandsbanki bank, one of the three large Icelandic banks, might be sold to investors from the Middle-East and China, within the next few weeks. According to local news service Vísir, a letter of intent has been signed between the prospective buyers and the current owner, the estate of the bankrupt Glitnir, which collapsed along with the rest of the Icelandic financial system.
Announcement follows plans to lift capital controls
The news comes only a week after the government announced a plan to lift the capital controls which have been in place since the fall of 2008. At the time the investors who own claims on the estate of Glitnir, which in turn owns Íslandsbanki, announced they were willing to hand over 60% of the proceeds of the sale of the bank to the government in foreign currency, in exchange for being permitted to repatriate the rest of the proceeds.
This agreement, and foreign ownership of Íslandsbanki, are intended to ensure that the easing of the capital controls will not lead to an excessive outflow of capital and a run on the Icelandic currency.
The sale might thus deliver the state 71 billion ISK (540 million USD/480 million EUR), in addition to a 34 billion ISK (260 million USD/230 EUR) dividend which the estate of Glitnir will make to the state prior to the purchase.
It is yet to be revealed who the foreign investors are, other than that it is a group of investors from China and the Middle-East.
Glitnir was one of Iceland’s big three banks that failed so spectacularly in the autumn of 2008. The other two were Landsbanki and Kaupthing. All three are still in winding-up proceedings.
Íslandsbanki bank, one of the three large Icelandic banks, might be sold to investors from the Middle-East and China, within the next few weeks. According to local news service Vísir, a letter of intent has been signed between the prospective buyers and the current owner, the estate of the bankrupt Glitnir, which collapsed along with the rest of the Icelandic financial system.
Announcement follows plans to lift capital controls
The news comes only a week after the government announced a plan to lift the capital controls which have been in place since the fall of 2008. At the time the investors who own claims on the estate of Glitnir, which in turn owns Íslandsbanki, announced they were willing to hand over 60% of the proceeds of the sale of the bank to the government in foreign currency, in exchange for being permitted to repatriate the rest of the proceeds.
This agreement, and foreign ownership of Íslandsbanki, are intended to ensure that the easing of the capital controls will not lead to an excessive outflow of capital and a run on the Icelandic currency.
The sale might thus deliver the state 71 billion ISK (540 million USD/480 million EUR), in addition to a 34 billion ISK (260 million USD/230 EUR) dividend which the estate of Glitnir will make to the state prior to the purchase.
It is yet to be revealed who the foreign investors are, other than that it is a group of investors from China and the Middle-East.
Glitnir was one of Iceland’s big three banks that failed so spectacularly in the autumn of 2008. The other two were Landsbanki and Kaupthing. All three are still in winding-up proceedings.
