Iceland Mag

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Iceland Mag


Goldman Sachs and three investment funds acquire 30% stake in Icelandic bank Arion

By Staff

  • Arion bank Founded on the ruins of failed bank Kaupþing, the biggest of the Icelandic banks when the 2008 financial crash hit. Photo/Eyþór.

The Wall Street investment bank Goldman Sachs and three international investment funds have purchased a 30% stake in Arion bank from the estate of failed Kaupþing, the local news site vísir reports. The purchase comes on the heels of the lifting of the capital controls on March 14.

Read more: Value of Króna drops by 3-4% as capital controls are lifted

Important milestone in moving past the 2008 crash
Prime Minister of Iceland Bjarni Benediktsson told the local newspaper Morgunblaðið that the sale was an „important milestone“ and that it was welcome news that foreign investors had purchased a major stake in an Icelandic bank.

Arion was founded in the fall of 2008 after the Icelandic financial system collapsed. The domestic operations of Kaupþing were transferred into Arion. The majority owner of the new bank was the estate of failed Kaupþing.

State owns 30% in Arion
After the sale of the 30% stake the estate of Kaupþing will own 57.9% of Kaupþing. The Icelandic state owns 13%. In addition the Icelandic state owns 100% of Íslandsbanki bank and 98.2% stake in Landsbankinn bank.

The proceeds from the sale, 48.8 billion ISK (450 million USD/420 million EUR) will be used to pay part of the 84 billion ISK (780 million USD/720 billion EUR) stability tax which was the part of a 2015 deal struck between the Icelandic government and the estates of the failed banks on the lifting of the capital controls.

Read more: A 40% exit tax to be imposed on foreign investors

The funds involved in the purchase are Attestor Capital LLP and Taconic Capital Advisors UK LLP, which now own 9.99% stake in Arion each, Sculptor Investments s.a.r.l. which is connected to Och-Ziff Capital Management Group, owns 6.6% and Goldman Sachs International which has owns 2.6%. In addition to the 30% they have already acquired the four international investors have an option to buy an additional 21.9%.

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