Kaupthing Resolution Committee to Present Its Sale

http://www.icelandreview.com/icelandreview/daily_news/?cat_id=28304&ew_0_a_id=320231

20/02/2009 | 12:07

Kaupthing Resolution Committee to Present Its Sale

The resolution committee of Kaupthing Bank will today present plans, undertaken by Morgan Stanley, on the sale of New Kaupthing to the claimants of the old bank to Minister for Business Affairs Gylfi Magnússon.

The headquarters of Kaupthing Bank in Reykjavík. Copyright: Icelandic Photo Agency.

The plans were presented to the bank’s claimants on Friday last week, which, according to Fréttabladid’s sources, had been approved by the former Independence Party-Social Democrat coalition government.

The resolution committee is keen on maintaining good relations with Kaupthing’s claimants and is therefore determined that the assets of the old banks that were transferred into the new state-run bank be included in the sale.

The negotiation process is considerably complicated and is likely to prove time-consuming because there are many claimants and they are entitled to variously high amounts. They have not appointed a formal council or committee to speak on their behalf during negotiations.

According to Fréttabladid, Morgan Stanley’s plan includes that the assets of old Kaupthing go into an asset management company, which would possibly be in the ownership of the Danish bank FIH, which used to be a Kaupthing subsidiary.

Such an arrangement is considered advantageous. If everything works out as planned, at least one of Iceland’s largest banks, which were nationalized last fall, would be re-privatized and thus stimulate competition and ease the load on the state’s obligations. Foreign ownership would probably also ease the bank’s refinancing.