Assistance to Companies Experiencing Difficulties

Landsbankinn has set clear internal guidelines for actions to assist companies in financial difficulty and also complies with the Joint Rules on the Financial Restructuring of companies to which all Icelandic financial institutions are signatories.

General solutions

General solutions are suited to companies with a good asset position, i.e. asset value is high, as is operating or enterprise value, and liquidity problems are temporary. 

Payment of interests and part of instalments

Companies that are only able to shoulder interest payments and part of instalments on loans based on updated interest terms can request a postponement of payment on part or all instalments for 12-24 months.

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Special solutions

Special solutions are for companies with damaged balance sheets, i.e. asset value is low, as is operating or enterprise value, equity position is negative and/or the companies are experiencing payment difficulties.

"Beina brautin" (liabilities < ISK 1.000 m)

"Beina brautin" is an agreement on the expedited processing of debt issues of small and medium sized enterprises. Under the terms of the agreement, Landsbankinn is to present viable companies with debt restructuring proposals before 1 June 2011.

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Loans adjusted to 90% of asset value or total value (liabilities > ISK 750 million)

Suited to larger companies with liquidity problems and interest-bearing debt exceeding ISK 750 million where it is clear that owners cannot provide new equity. Landsbankinn is willing to write down the debt of viable companies. Converting debt into share capital or subordinated debt will also be considered.

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Disclaimer


The guidelines set forth in this document are intended for the employees of Landsbankinn hf. (hereafter Landsbankinn or the Bank) and do not confer upon companies experiencing payment difficulties unilateral rights to financial support or assistance from the Bank. Decisions to grant financial support or to assist companies experiencing payment difficulties shall be made at Landsbankinn's discretion in each case, based on both subjective and objective factors.

Any financial support or assistance Landsbankinn grants companies shall comply with the Bank's rules and be in accordance with the interests of the parties.

Landsbankinn reserves the right to base its legal position on contracts between the Bank and companies in payment difficulties. Alterations to contracts are contingent on Landsbankinn reaching an agreement with the company in question.

Resolving financial difficulties is primarily the responsibility of each individual company; however, these guidelines provide Landsbankinn with the means to assist companies experiencing payment difficulties insofar as possible and as the Bank’s interests allow.

Further information

  • Managers and/or owners of companies are advised to contact their service representative if they wish to request further information.