Iceland launches Islandsbanki sale in push to clear 2008 crisis legacy
Iceland launched the sale of nearly half of its 45.2% stake in Islandsbanki on Tuesday, as its finance minister told Reuters that recent global market turmoil has not dented investor interest in the country, News.az reports citing Xinhua.
Bookrunners put a 20% stake in the lender on sale on behalf of the government on Monday in a process that would prioritise domestic retail investors. The offering could be increased to cover the full stake if investor demand is sufficient.
"There is a window of calm," Minister of Finance and Economic Affairs Dadi Mar Kristofersson told Reuters in an interview, referring to a break in recent global market turmoil hallmarked by trade tariffs and geopolitical uncertainty.
Shares are offered at a fixed price of 106.56 Icelandic krona - or a 5% discount over the average price of the last 15 trading days - to retail investors. Larger and institutional investors can bid in a Dutch auction with the minimum price matching that of the retail offering, the bookrunners said in a note seen by Reuters.
The sale is coordinated by Citi, Barclays and Kvika while ABN AMRO (AS:ABNd) in cooperation with ODDO BHF, Arctica Finance, Arctic Securities, Arion Banki, JPMorgan, Landsbankinn and UBS are acting as bookrunners.
The Icelandic government had acquired 75% of the bank during the 2008 financial crisis, which roiled the country’s banking sector and plunged the economy into recession. Its GDP now stands at $35 billion, according to the IMF, more than 60% higher than 2007.
The government sold part of its Islandsbanki stake in 2022, but there were complaints that it was not sufficiently transparent.
Kristofersson said he had seen significant interest in the share sale and that markets were positive towards Iceland despite global upheaval that often dents interest in smaller and emerging market economies.
"Although we were perceived as relatively more riskier than the U.S. in past turmoil, this time around, we are viewed as relatively safe compared to the U.S. market," Kristofersson said.
He added that U.S. tariffs would have minimal impact on Iceland – and its comparatively low 10% proposed level could even give it an advantage over neighbouring countries.
Additionally, he said that while significant house price increases were worrisome for citizens, the market "doesn’t look bubbly at all", and the government was working to build more affordable housing and use the tax system to disincentivise short-term tourism rentals.
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