Glitnir Islandsbanki creditors given choice

glitnirThe Icelandic government and the Glitnir Bank resolution committee have come up with two options for the future of the company and its eventual re-privatisation. Creditors are being asked to vote for their preferred option before the end of the month.

The government’s favourite option is to turn over 95 percent of the bank to its creditors and retain a five percent stake. This way the government would not need to inject further funds itself, BBC News reports.

The alternative is for the government to keep the bank and repay investors with bonds which would leave them in charge of 90 percent of the bank by 2015. The bonds would be sold at a price allowing the government a return on its investment, the Ministry of Finance said.

The OECD recently described Iceland’s state ownership of its banks as an effective temporary solution; but warned that the banks should be re-privatised as soon as practically possible.

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