29 September 2008

The Government of Iceland provides Glitnir with new equity

No. 28/2008

September 29, 2008



The Government of Iceland provides Glitnir with new equity

The Office of the Prime Minister of Iceland has today announced:


The Government of Iceland provides Glitnir Bank hf. with new equity


The Government of Iceland and the major shareholders of Glitnir Bank hf., in cooperation with the Central Bank of Iceland and the Financial Supervisory Authority, have come to an agreement under which the Government will provide Glitnir with new equity. This action is taken in light of temporary liquidity difficulties faced by Glitnir and because of the unusually difficult situation currently reigning in the global financial market. The Government, through the intermediation of the Central Bank of Iceland, will provide Glitnir with equity amounting to 600 million euros (about 84 bn. ISK) and will own 75% of shares in Glitnir.


A meeting of Glitnir shareholders will be called as soon as is permissible under the Articles of Association.  Proposals relevant to today’s action will be presented for shareholder approval at the meeting.


The Financial Supervisory Authority deems Glitnir´s capital and asset portfolio to be solid and its loan book of good quality. The capital adequacy ratio of Glitnir will be 14.5% after this action. The bank’s operations will be uninterrupted.


The Government does not plan to hold its share in the bank for an extended period. The purpose of this action is to enhance stability within the financial system.


Further information on this action will be announced later today.