Failed Icelandic bank Kaupthing ehf has named banks to manage an upcoming IPO of Arion banki hf., the domestically focused lender carved out of Kaupthing's post-crisis wreckage, Reuters reported Jan. 18, citing "people close to the matter."

Swedish investment bank Carnegie, Citi and Morgan Stanley will reportedly act as global coordinators for the share sale, which is expected to launch in April. Deutsche Bank is among banks that will have book runner roles, the sources added.

Icelandic pension funds are now unlikely to take up a stake in Arion, leaving the offering to go ahead without a cornerstone investor, one of the newswire's sources said. The funds rejected Kaupthing's prospective valuation of Arion at 0.8x book value as too high, the source added.

Kaupthing, now a holding company whose shareholders include its former creditors, owns 87% of Arion Banki. The remainder is controlled by the Icelandic government.