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The Casino Nation: Iceland Is Seeking Investments

 

Picking apart the rubble left in the economy by Iceland's previous government, the country's new government is looking to clean up the financial sector by continuing the privatisation of banks in which the state has held a stake. The "casino nation", Iceland, whose record bankruptcy in 2008 stunned Europe, and especially depositors from the UK and the Netherlands, is looking to clean up its increasingly private banking sector to make it more attractive to investors.

Daði Már Kristófersson, Iceland's Minister of Finance. Photo: Eva Björk Ægisdóttir

The Minister of Finance, Daði Már Kristófersson, intends to submit a new bill on the sales process for the state's stake in Íslandsbanki before the next sale takes place. The plan is still to hold a public auction, but further details on the sales process are in the works. The Minister of Finance does not disclose what changes to the sales process are planned.

This is stated in Daði Már's written response to a question from Viðstikkablaðis.

When asked when the next sale of the state's stake in Íslandsbanki is planned, Daði says that legislation on the sales process is being prepared.

The law needs to go before parliament and receive its parliamentary treatment. Once that process is complete, decisions can be made on when the sale will take place.

Photo: Íslandsbanki / Financial Times

The last government had planned a public offering of the state’s stake in Íslandsbanki last year, but the sale was postponed after former Prime Minister Bjarni Benediktsson decided to end the government partnership in October.

Parliament had passed a law on the disposal of shares in Íslandsbanki  last June. The law stipulates that the state’s stake in the bank will be sold in a market-based auction or auctions.

Asked why new laws are needed on the sales process in light of the fact that parliament passed a law on the disposal of the state's stake in Íslandsbanki last summer, Daði Már said:

At this stage of the matter, it is not possible to comment other than that changes to the current law are being prepared that aim to ensure an even more successful auction.

Daði Már said in Silfrin last night that the aim is for the state's next sale of its stake in Íslandsbanki to take place this year. He also noted that the sales process would be presented to parliament in the spring.

The Treasury owns a 42.5 per cent stake in Íslandsbanki, which is worth around ISK 106.7 billion ($ 755 mln). The Treasury sold a 35 per cent stake in the bank for ISK 55 billion in a public offering in the summer of 2021 and a 22.5 per cent stake for ISK 52.7 billion in a private offering with a bid structure in March 2022.

Last summer, the Ministry of Finance and Economic Affairs decided to enter into agreements with three parties, Barclays, Citi and Kvika, to act as managers in the planned public offering of shares in Íslandsbanki. The Ministry also entered into an agreement with Landsbanki's Corporate Advisory to act as an independent financial advisor to advise the Ministry on the planning and supervision of the planned public offering of the state's shares in Íslandsbanki.

Based on: Viðskiptablaðið (in Icelandic)

Read also:

  • Сold comfort from landmark Islandsbanki IPO as Iceland politics puts privatizations in limbo / Euromoney.com
  • Iceland launches privatisation of state-owned lender Islandsbanki / Financial Times

The North Observer

15.01.2025
 
 

 

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