Glitnir in Luxembourg establishes subsidiary to administer the bank’s asset portfolio

Glitnir in Luxembourg establishes subsidiary to administer the bank’s asset portfolio

Glitnir in Luxembourg has established the subsidiary Reviva Capital to handle the administration and management of the bank’s asset portfolio. Reviva Capital has received an operating license from the authorities and the financial regulator in Luxembourg to handle collection and asset administration activities, and intends furthermore to offer other parties its services. Reviva Capital has eighteen employees. Management and key employees of Glitnir in Luxembourg own a 10% stake in the company, with the remainder held by Glitnir in Luxembourg. The employees’ holding is conditional and linked to the company’s long-term objectives.

“Reviva Capital faces the complex, long-term task of maximising the value of Glitnir’s asset portfolio in Luxembourg. To accomplish this, it is important to ensure stability and long-term thinking; with this in mind, Glitnir’s Resolution Committee has wholeheartedly supported the company’s establishment. The group leading the company has been very successful in the restructuring efforts of the bank since the collapse and enjoys the confidence of both the authorities and creditors in Luxembourg, including the largest creditor, the Luxembourg Central Bank (BCL)," says Árni Tómasson, chairman of Glitnir’s Resolution Committee.

Reviva Capital has concluded a service level agreement (SLA) with Glitnir’s liquidator in Luxembourg to manage Glitnir’s loan book there, which is comprised primarily of loans to European real estate companies. Most of the assets are in Germany, the Nordic countries and the UK. “My principal role as liquidator, and the key aspect in agreements with creditors is to ensure secure, professional management of the bank’s assets throughout the entire winding-up process. The establishment of Reviva Capital is an important step in that direction,” says Eric Collard, auditor and liquidator of Glitnir in Luxembourg.

Reviva Capital offers asset management and debt collection, as well as restructuring advisory. The company’s clients include banks, investment funds, liquidators and others who control assets and loan portfolios which need to be administered, restructured and collected. All of the company’s employees have a background in corporate banking, investment banking, real estate financing and corporate finance.

Assets under management by Reviva Capital now amount to some EUR 1.6 billion, or the equivalent of ISK 250 billion. Most of these are loans to property companies and holding companies, but also to individuals. Reviva Capital recently concluded an agreement with the estate of Landsbanki Luxembourg and its two largest creditors, BCL and the Resolution Committee of Landsbanki Íslands hf., for administration and collection of a major portion of the asset portfolio of the estate of Landsbanki Luxembourg. In tandem with this, Reviva Capital has hired several former employees of Landsbanki Luxembourg.

Reviva Capital’s minority shareholders include MD Ari Daníelsson, CFO Paul Embleton, General Counsel Sigþór H. Guðmundsson and Fredrik Engman who heads the company’s Workout Management. The Board of Directors is comprised of Eric Collard, liquidator of Glitnir in Luxembourg, Kristján Óskarsson, MD of Glitnir in Iceland and Ari Daníelsson, MD of Reviva Capital.

Glitnir in Luxembourg
Glitnir in Luxembourg is currently in a voluntary and solvent winding-up procedure, in which the bank's assets are realised over a longer term with the objective of maximising their value. The bank entered moratorium in October 2008 following the collapse of the parent company in Iceland. As a part of the financial restructuring of Glitnir in Luxembourg, Glitnir’s Resolution Committee converted the parent company’s loans to equity and it holds all of the bank’s equity. During the moratorium period, agreements were reached with the bank’s largest creditors and the authorities in Luxembourg. This agreement delivered full recovery to deposit holders and general creditors, who received full payment of their funds in April 2009. Upon the conclusion of the moratorium in April 2009, Glitnir handed in its banking license in Luxembourg and entered winding-up proceedings as provided for by law and rules in Luxembourg. The winding-up proceedings can be expected to take a minimum of five years. When Glitnir was placed in winding-up proceedings the liquidator in Luxembourg replaced the Board of Directors of Glitnir in Luxembourg and assumed direction of the bank during its winding-up proceedings. The liquidator’s role by law includes ensuring the equal treatment amongst creditors and shareholders and maximising the value of assets.