"Beina brautin" is an agreement on the expedited processing of debt issues of small and medium sized enterprises. Under the terms of the agreement, Landsbankinn is to present viable companies with debt restructuring proposals before 1 June 2011.
Small and medium sized enterprises with liabilities of up to ISK 1,000 million can apply to have their debt adjusted to meet re-evaluated asset or operating value, whichever is higher, plus the value of other guarantees and security for the company's debts (company's total enterprise value). There is also an option to issue deferred 3-year loans to solve liquidity problems. As a rule, the terms of a deferred loan are very favourable.
Landsbankinn has decided to amend the Beina brautin solution to make it available to more viable companies than originally intended. In so doing, the bank has extensively loosened requirements concerning the importance of owners which, among other things, allows real estate companies to utilise the solution. Furthermore, Landsbankinn offers companies with liabilities exceeding total value to utilise the solution in the case of liquidity issues, even in lieu of writing off debt.
Small and medium sized enterprises with liabilities of up to ISK 1,000 million can apply to have their debt adjusted to meet re-evaluated asset or operating value, whichever is higher, plus the value of other guarantees and security for the company's debts (company's total enterprise value).
In a nutshell
- These measures are designed to expedite the processing of debt issues of small and medium sized enterprises.
- Viable companies with liabilities under ISK 1,000 million will receive proposals for financial restructuring before 1 June 2011.
- Trust and confidentiality must characterise the relationship between stakeholders and the continued involvement of current owners and/or key management is important to the company's future.
- Company debt is adjusted to asset and operating value, whichever is higher, plus the value of other guarantees and security for the company's debts.
- Concurrent to financial restructuring, the guarantees and liabilities of owners are re-evaluated with an eye to payment capacity and asset position.
- Assessment of company value may be carried out by a third party
- All companies agreeing to debt settlement and financial restructuring proposals reserve the right to increased benefits based on court rulings.
Conditions
- Company is viable.
- Continued operations best serve the interest of creditors.
- Continued involvement of current owners and/or key management is important to the company's value.
- Trust and confidentiality characterises the relationship between stakeholders.
- Annual financial statements for the last 2-3 years, including the financial statement for 2009 and draft income statement for 2010.
- Detailed cash flow budgets.
- Tax returns for 2010 and 2009, if owners are guarantors.
