By Act No. 68/2005, the Minister
for Agriculture was empowered to sell all the assets of the Agricultural Loan
Fund and negotiate the taking over of all its liabilities. The
Executive Committee on Privatisation has been instructed to initiate
preparations for the sale of the Fund’s loan portfolio and the taking over of
its principal liabilities.
The sale is subject to the
1. The tenderer will take over all the
liabilities of the Loan Fund, which in the majority of cases are guaranteed by
2. The tenderer must have a solid
financial position and an international credit rating.
3. The tenderer must be a
financial undertaking in the meaning of Sub-sections 1-3 of Article 4 of Act
4. The tenderer must accept the
condition of honouring loan commitments already undertaken by the Board of
Directors of the Fund subject to fulfilment of conditions.
5. The tenderer must
declare, by the submission of an offer to purchase the bonds in question, that
the interest on the bonds will not be raised, nor their terms altered to the
disadvantage of debtors, beyond the scope agreed by the Board of Directors of
the Agricultural Loan Fund on taking over the loans.
6. The tenderer must
warrant that the provisions of the bonds concerning the debtor’s option to
prepay will be maintained.
7. The tenderer must
declare his intention to endeavour to provide financial services to the
agricultural sector on a commercial basis.
The tenderer must declare his intention to endeavour to ensure
that the employees of the Loan Fund retain their jobs or receive comparable
jobs with the tenderer.
According to the audited annual
financial report of the Fund for the year 2004, deposits (borrowings) of the
Fund as at 31 December 2004 amounted to approximately ISK 15.2 billion, while
lending in the form of bonds amounted to approximately ISK 15.6 billion.
Furthermore, cash and claims on lending undertakings amounted to ISK 2.9
Parties interested in participating
in the pre-selection process for a tender for the purchase of the loan
portfolio of the Fund and taking over of its liabilities should notify the
Executive Committee on Privatisation. Only parties meeting the conditions of
Sections 1-8 above will be eligible for the pre-selection process. Notices from
interested parties should be submitted before 4 p.m. on Friday, 5 August 2005,
The Executive Committee on Privatisation,
Ministry of Finance, Arnarhváli
Att. Stefán Jón Friðriksson / Jörundur Valtýsson