Central Bank of Iceland major insurance company owner

glitnir-logoThe Central Bank of Iceland now owns 73 percent of the Sjova insurance company, it was revealed in parliament today.

Eyglo Hardardottir (Progressive Party) asked Finance Minister Steingrimur J. Sigfusson (leader of the Left Green Movement) about the ailing insurer today. He answered that the Central Bank is the biggest owner, along with Islandsbanki and SAT.

Little has been heard about Sjova since spring 2009 when large chunks of it went on sale and Glitnir (now Islanndsbanki) called for shareholder unity to save Sjova from bankruptcy following the collapse of negotiations with potential foreign investors.

Sjova was used as a massive investment vehicle during the boom years and was closely linked to companies including Baugur Group, Glitnir Bank and Bakkavor.

Normal practice for the authorities would be to split the bankrupt insurance company’s customers among other companies; but the FME financial regulator in Iceland deemed Sjova simply too big for that. The next stage was to find an investor to help save the company with ISK 16 billion (USD 125.5 million). The company’s three biggest creditors provided the money; one of which is the Icelandic government.

The Minister said that Islandsbanki is looking into the possibility of selling the company and the government will consider the bank’s findings when they are released.