Íslandsbanki sell-off could start this summer
Icelandic State Financial Investments (ISFI) submitted a memo to the minister on 17th December recommending the State sell its stake in Íslandsbanki. The Minister of Finance has approved the request and it was discussed yesterday by two Alþingi standing committees. They specifically discussed the details of the proposal’s process and expected outcomes from the sale. In his December letter to the committees, minister Bjarni Benediktsson requests their feedback by the 20th January.
The same day, he also wrote to the Central Bank of Iceland asking for feedback on bidder equality, the likely effect of the sale on currency markets, the currency reserves, and cash on the open market. He requested the feedback by this coming Friday. A final decision will be made when all requested feedback is received.
The ISFI memo recommends appointing lawyers and sales advisers this month, followed by due diligence, valuations, and more, and for offers and subscriber promises to be collected in June. The finance ministry’s proposal which is currently under review recommends selling a quarter of the bank in an initial public offering, if the market conditions are favourable, and more later, until most or all of the States’s shares have been sold off.
The proposed sale has split opinion among politicians and economists alike. Many feel the global situation now means it would be better to wait. Others point to high sovereign debt as a good reason to sell, and to stock market recoveries around the world as cause for optimism on price.