News announcement from LBI hf. - Creditors Meeting

The Winding-up Board of LBI hf. held a Creditors' Meeting today, 12 March 2015.

As of year-end 2014, LBI hf. has already recovered close to ISK 1,300 billion of the ISK 1,637 billion of estimated recoveries. This means that as of the same point in time cash already collected amounted to almost 80% of estimated total recoveries. Bonds issued by Landsbankinn hf. amount to around ISK 200 billion or some 60% of the ISK 340 billion which remains to be recovered.

An important step was reached near the end of last year with agreements on changes to the terms of Landsbankinn's bonds. These secured the value of the bonds and cash flow in foreign currencies. In tandem with the conclusion of these agreements LBI was granted an exemption from capital controls authorising partial payments in foreign currencies to priority creditors equivalent to around ISK 400 billion. In addition, the Central Bank of Iceland gave a "good faith promise" to grant further exemptions for the same purpose.

Partial payments totalling ISK 1,118.6 billion have been made to priority claims with reference to Art. 112 of the Act on Bankruptcy etc. (BA) equivalent to around 84% of the total amount of such claims. The Winding-up Board expects that sufficient funds will be recovered to pay the remaining outstanding balance on these claims, around ISK 210 billion, before the end of 2016.

As of the end of last year, the estimated value of LBI's assets is around ISK 242 billion more than the outstanding balance on priority claims recognised with reference to Articles 109 to 112 of the BA. As before, the Winding-up Board intends to conclude LBI's winding-up proceedings with composition once payment of such priority claims has been completed. Preparations to this effect have already begun.

At the meeting the Winding-up Board presented creditors with its written report on the progress of the winding-up proceedings during the past year. An account was also given of the principal measures taken regarding those assets and interests dealt with in the winding-up proceedings, as well as the main aspects in the development and resolution of disputes on recognition of claims lodged.

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