Information to Creditors in relation to LBI‘s exemptions from capital controls
In a letter from the Central Bank of Iceland, dated 11 January 2016, LBI hf. was granted exemptions from the capital controls pursuant to the Act No 87/1992 on Foreign Currency with respect to the settlement towards creditors based on the company´s Composition Agreement. The letter also stated that the creditors of LBI hf. had been granted certain exemptions in relation to payments received pursuant to the Composition Agreement.
The relevant part of the letter further reads:
„The Central Bank furthermore grants the domestic creditors of LBI hf. exemption from the first and fourth paragraphs of Art. 13 e of Act No. 87/1992, on Foreign Currency, for receipt of a note issued in foreign currency as provided for in the confirmed composition. The Central Bank also grants domestic creditors of LBI hf. exemption from Articles 13 e, 13, f 13 g, 13 h and 13 l in connection with capital movements in foreign currency which they receive from LBI hf. in connection with the company´s settlement as provided for in the confirmed composition.
Furthermore, the Central Bank grants the foreign creditors of LBI hf. exemption from the first and third paragraphs of Art. 13 b of Act No. 87/1992, on Foreign Currency, to receive share capital in LBI hf. in ISK in connection with the company´s composition. The Central Bank also grants foreign creditors exemption from the first and fourth paragraph of Art. 13 e of the Act on Foreign Currency, for receipt of a note issued in foreign currency as provided for in the confirmed composition.”
According to the aforesaid exemptions the receipt of cash, shares or bonds, which either domestic or foreign creditors may receive as fulfilment of their respective claims against LBI hf. in accordance with the provisions of the Composition Agreement of the company, is authorised under Act No. 87/1992 on Foreign Currency. Furthermore domestic creditors are authorised to use foreign currency which they may receive from LBI hf. in relation to the fulfilment of the Composition Agreement, e.g. for foreign investments, and such foreign currency is not subject to repatriation obligations pursuant to the Act on Currency Issues.