Landsbanki: recovery rises
According to the last report from the Landsbanki Winding-Up Board, the recovery from the Landsbanki assets is now expected to cover 94% of the priority claims, using the currency rate end of last March. More interestingly, it covers 99% at the currency rate of 22.4. 2010. It’s the currency rate of that date against which the claims were sat in order to lessen the currency risk when it comes to settle with creditors. The value of the assets is now estimated to be ISK1.3bn, with the priority claims at 1.319bn.
Johannes Karl Sveinsson, who was on the negotiation committee, said to Ruv yesterday that he’s still worried about certain aspects of the eventual ESA process, the recovery won’t change anything re ESA though the improving recovery is good news. There is, says Sveinsson, still the risk that the UK and the Netherlands will bring Iceland to court since the two countries compensated Icesave depositors and claim Iceland owes them for it.
Minister of finance Steingrimur Sigfusson points out that the improved recovery is good news but won’t change anything regarding the dispute with the UK and the Netherlands nor ESA. He is referring to the fact that the countries claim they have an outstanding loan to Iceland. The ESA process regards whether Iceland has violated the deposit guarantee.
Sigfusson’s comments are interesting. After the referendum that rejected the Icesave agreement Sigfusson indicated that there was nothing to worry about, there was enough money to pay. That is, of course not the relevant point, as Sigfusson now indicates. Reality is slightly more complicated.
Landsbanki can’t start to pay out to creditors until the Icelandic High Court has confirmed that deposits are priority claims, as the Icelandic Government stipulated in October 2008. The ruling is expected in autumn. The Reykjavik County Court has already ruled that deposits are priority claims.
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