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Arion banki to launch IPO, listing on Nasdaq markets in Iceland, Sweden


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Arion banki to launch IPO, listing on Nasdaq markets in Iceland, Sweden

Icelandic lender Arion banki hf. disclosed its intention to launch an IPO and listing of its shares on Nasdaq Iceland and Swedish depository receipts, representing its shares, on Nasdaq Stockholm.

The listing on the Nasdaq markets in Iceland and Stockholm is expected to take place in the first half of 2018. Nasdaq Stockholm has approved the lender's application for listing, subject to regulatory and market conditions. Arion banki has also applied for listing on Nasdaq Iceland and expects the application to be approved, subject to regulatory and market conditions.

Arion banki will not receive any proceeds from the IPO, with the planned offering to consist exclusively of existing shares held by the bank's current shareholder, Kaupskil ehf., the wholly owned subsidiary of Kaupthing ehf. The lender said it has not yet decided on the size of the IPO, but it is expected to be at least 25% of the bank's total shares outstanding plus an additional overallotment option to be sold by Kaupthing, which owns 55.57% of Arion banki's share capital.

Attestor Capital, which owns a 12.44% stake in Arion banki, may participate in the offering, subject to a minimum ongoing holding, the bank noted.

Kaupskil, Attestor Capital and other shareholders — Taconic Capital, Och-Ziff Capital Management Group LLC and Goldman Sachs International — declared their intention not to divest their remaining shares in Arion banki for a period of 180 days after the first day of trading on Nasdaq Iceland and Nasdaq Stockholm, apart from certain exceptions.

The IPO and listing on the Iceland and Sweden stock exchanges will expand Arion banki's shareholder base and enable it to access Icelandic, Swedish and other international markets.

Arion banki's board of directors also set medium-term financial targets for the bank, including reducing its common equity tier 1 ratio, which stood at 23.6% as of March 31, to about 17%. The bank noted its policy to pay out 50% of its net earnings as dividends in the future, with capacity for additional extraordinary dividends to be paid from excess capital going forward.

Meanwhile, the board of directors are examining the structural options for Arion banki's international payment platform subsidiary, Valitor Holding HF with a view to sell the unit in the medium-term. However, the bank noted that no firm decision has been taken in terms of selling part or all of Valitor.

Arion Bank Investment Banking, Carnegie, Citigroup and Morgan Stanley serve as joint global coordinators on the IPO. Deutsche Bank and Goldman Sachs International serve as joint book runners on the deal, while Fossar, Islandsbanki, Landsbankinn and Svenska Handelsbanken are co-lead managers.