Q&A: General Questions
It should be noted that the Q&A below provides only a summary of the relevant provisions and effect of the proposed Moratorium. It is not intended to and does not amount to legal or financial advice to any person. If any recipient is in doubt as to their legal position, they should seek independent legal advice.
Old Glitnir and New Glitnir balance sheet information has recently been published by the IMF. To what extent is the published information an accurate reflection of the value of those banks?
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The IMF has itself highlighted that the data provided is preliminary and tentative. The balance sheet information is not final and is likely to be subject to significant and/or material change. |
Who are members of the ICC and how were they selected?
The identity of the members of the ICC is confidential. Members were proposed by the Resolution Committee on the basis of size and type of debt, as well as geography. As a result, the members represent a broad cross-section of Old Glitnir's global creditor base.
The ICC has no formal powers, and its role is purely consultative. Members of the ICC are not remunerated and do not benefit from any special treatment in respect of any claim which its members may have against Old Glitnir. |
What is being done to consult with creditors and what happens next?
Deloitte will be assisting the Old Glitnir Resolution Committee to set up an informal committee of creditors representing a broad cross section of financial institutions, international deposit holders, and other creditors. Subject to the creditors' committee members entering into strict confidentiality undertakings, the Resolution Committee, with the assistance of Deloitte, intend to consult with the creditors' committee on their plans for realising the assets of Old Glitnir and making payments to creditors. In this regard, contact will be made with known creditors of Old Glitnir shortly, if not already done so.
Those creditors of Old Glitnir wishing to register their interest in this regard are invited to contact Old Glitnir through the contact details shown on this website. |
Will I be provided with more information?
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Regular update information will be posted to this website as it becomes available. Information will also be made available through the creditors' committee process (see below). |
Has the Resolution Committee appointed any advisers?
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Yes. The Resolution Committee appointed the UK limited liability partnership of Deloitte & Touche LLP (“Deloitte”) to assist with the communication and consultation with all remaining creditors of Old Glitnir.
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How much will I get back and when will I be paid?
In the current financial market environment, it is not possible to estimate the total payments to Old Glitnir's creditors with any certainty.
No timetable is currently in place in respect of potential payments to creditors. Further details on the timing of asset realisation and payments to creditors will be released when they become available. |
As a bond holder, what will happen to coupon payments on my bonds?
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According to article 5 of Act 128/2008, the FME may limit or prohibit the disposal of the financial undertaking's capital or assets. With reference to the legislation, for the time being no claims owned by foreign entities will be paid pending restructuring of Old Glitnir. This includes all payments due on foreign denominated bonds issued by Old Glitnir and/or its predecessor, Islandsbanki. |
Why is the appointment of a Resolution Committee the best option for Glitnir and its creditors?
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The appointment of a Resolution Committee will help maximise asset realisation for creditors, as well as help co-ordinate communication with creditors and other stakeholders. |
Why has a Resolution Committee been appointed to manage the affairs of Glitnir hf? What is the role of the Resolution Committee?
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The Resolution Committee has been appointed to oversee the realisation of the assets retained within Old Glitnir and to distribute payments to the remaining creditors. In addition, the Resolution Committee will be responsible for management of the business and affairs of Old Glitnir on an ongoing basis. |
What has been transferred to New Glitnir and what has been retained in Old Glitnir?
New Glitnir has taken over all of Old Glitnir's deposits in Iceland, together with the assets relating to Old Glitnir's Icelandic operations, such as loans and other claims.
Old Glitnir retains all foreign assets and those liabilities not transferred to New Glitnir. |
Why has New Glitnir been established?
In light of recent events in the financial markets, the Financial Supervisory Authority of Iceland ("FME") used powers granted by the Icelandic Parliament with reference to Article 100 of Act. No. 161/2002, as amended, to take control of Glitnir banki hf ("Old Glitnir") on 7 October 2008. On 15 October 2008, New Glitnir Bank hf ("New Glitnir") was created and Old Glitnir's deposits in Iceland, as well as the assets relating to Old Glitnir's Icelandic operations, were transferred to it. New Glitnir is wholly-owned by the Icelandic Government.
New Glitnir was established to help ensure the continued provision of normal banking services in Iceland. |
There are various and many reports in the press that Old Glitnir is, or may be, considering selling assets of the bank quickly at low values, often referred to as 'fire sales'. What is Old Glitnir approach to asset sales?
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Old Glitnir is pursuing a strategy to maximise the value and realisation of owned subsidiaries and other assets. Old Glitnir has not, and does not intend to, enter into any unnecessary quick 'fire sale' of subsidiaries or assets. Old Glitnir intends to develop and pursue a considered strategy for maximising the realisation of assets. Old Glitnir does not consider that selling assets in the current market environment to be generally consistent with maximising the realisable value of the assets it owns. In certain limited circumstances, particular regulatory factors affecting some overseas assets has meant that selling those assets has been consistent with maximising or protecting the value of subsidiaries or other assets of Old Glitnir. |
Role of the Resolution Committee
The Resolution Committee will continue its work and its role will be largely unchanged. Its principal tasks will continue to be:
- To continue to administer Glitnir authorised activities under the supervision of FME;
- To continue to serve as Glitnir Board of Directors and exercise the rights and obligations formerly held by the Board and shareholders' meeting;
- To assess Glitnir's assets once the time limit for submission of claims has passed for the purpose of deciding whether the bank's assets are sufficient to cover its obligations;
- To work towards obtaining the highest possible value for the bank's assets, including waiting for outstanding claims to fall due if considered necessary rather than attempting to sell them off immediately;
- To convene and direct creditors' meetings, as deemed suitable, to present the measures taken by the Resolution Committee; and
The Resolution Committee is to ensure that the bank's assets and rights are disposed up in the most cost-effective manner, that claims and amounts on deposit are collected, that no rights are lost which could be of value and that all necessary actions are taken to prevent damage to the bank's interests.
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How can we be expected to decide if we want to own Islandsbanki without updated financial statements? Why don’t we wait until they are provided?
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The Resolution Committee acknowledges that, in an ideal scenario, it would have access to audited financial statements for 2008 and interim financial statements for 30 June 2009. However, these are not available as described by ISB. What the Resolution Committee does have are: (1) the final draft of the 2008 financial statements, and (2) monthly financial management reports presented to the ISB board for January to July 2009. ISB is working extensively on interim financial statements as at 30 June 2009. These will be presented to the Resolution Committee before the end of the month. ISB is also working on various cash analyses which will support the interim financial statements.
The Resolution Committee is bound by the agreements that have been signed. These agreements are based on term sheets signed previously with Government stipulating that a decision must be made by 30 September 2009. The Resolution Committee has raised with the Government the possibility of this deadline being extended but this has been rejected. The ICC also raised this point but the response of the Government was the same. |
