Goldman Sachs and a group of hedge funds have acquired a stake of about 30% in Iceland’s Arion Bank for ISK48.8bn ($448.3m).
Goldman Sachs International bought a 2.6%, Sculptor Investments bought 6.6%, Tactonic Capital Advisors UK bought 9.99%, while Attestor Capital bought a 9.99% stake in Arion, which was established from the domestic assets of the failed Kaupthing Bank.
The private placement dilutes Kaupthing’s interest in Arion to 57.9%. The transaction also offers the investors the option to purchase another 21.9% of Arion’s shares, though the option can only be implemented before an initial public offering.
Kaupthing CEO Paul Copley said: “In completing this deal, which is the largest equity portfolio investment by foreign parties in Icelandic history and immediately after the lifting of capital controls, we have secured international investors with a medium to long term view of their investment in Arion.
“All of them are existing investors in Kaupthing and have chosen to re-invest in Iceland rather than move their money offshore, which is the strongest possible signal of their confidence in both Iceland generally and Arion specifically.”
Proceeds from the deal will be used to pay the Icelandic government’s ISK84bn secured note, which was agreed as part of Kaupthing’s stability contribution during composition.
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Arion Bank CEO Hoskuldur Olafsson added: “Attracting new shareholders, international investors, marks the beginning of a new era. We will continue to examine the possibility of listing the Bank on the stock market, which will further diversify the shareholder base.”