Settlement of debts to the tune of 1200 billion krónur

On 21 July 2010 Novator and Björgólfur Thor Björgólfsson issued a press release to the effect that agreement had been reached with creditors in Iceland and abroad for a settlement of all the debts of Novator and Björgólfur Thor.

In the media the following day it was revealed that the total amount of the settlement ran to the sum of 1200 billion Icelandic krónur.  The agreement attracted considerable attention and was widely discussed in the media.  It should be pointed out that the loans that came under particular scrutiny in the SIC report  and on which Björgólfur Thor has previously issued public comments form part of this total settlement of debt.

The press release ran as follows:

Björgólfur Thor Björgólfsson and his investment company Novator have now concluded an agreement for a settlement of debts with his creditors abroad and in Iceland.
Under this agreement the debts will be settled in full and without write-down.  The settlement includes and covers all of Björgólfur Thor’s and Novator’s assets; a comprehensive assessment and valuation of these assets was carried out through an international consultancy company.  Björgólfur Thor will continue to be a shareholder in companies such as Actavis, Play, CCP and Verne Holding.  However, the dividends from these holdings and their realisation value in the case of sale will go towards the settlement of the debts, together with various of his personal assets.  These include a real estate in Reykjavík and a summer cottage at Thingvellir.
Parallel to this debt restructuring, an agreement has been reached on the financial restructuring of the pharmaceutical company Actavis.
In negotiating this agreement Björgólfur Thor and Novator was assisted by two international companies, the respected legal firm Linklaters and the business consultancy AlixPartners, one of the best-known firms in the world in the area of financial restructuring.
A statement was also issued by Björgólfur Thor on this occasion.  It read as follows:
On the collapse of the Icelandic financial system in autumn 2008 I incurred large personal liabilities arising from loan transactions.  When dealing with large sums on my own account I have always taken the view that I could not enter into a business transaction without accepting the possibility of some personal repercussions if and when everything turned for the worst.  This seems only natural to me.  On Friday, 3 October 2008, my registered assets in financial companies in Iceland were valued at around 60 billion krónur.  With the collapse of Landsbanki bank and the investment bank Straumur-Burðarás these assets became worthless, leaving me with considerable debts.  Ever since the collapse I have worked tirelessly to come to a settlement with my creditors and this settlement has finally been achieved.  Certainly this has the effect of limiting my business interests to a much smaller sphere than previously and I will devote the next years to engaging in activities that will be to the benefit of my creditors, but I welcome our having achieved this outcome.  I have always aimed to come to an honourable settlement with my creditors.
One element of the debt restructuring plan consists of agreements for the financial restructuring of Actavis.  I will continue to be a leading shareholder in the company and sit on its board.  I have been involved in building up Actavis steadily since 1999 and the company has expanded greatly and flourished under my ownership and is now one of the leading generic pharmaceuticals companies in the world.  The value of my holding in Actavis is going towards the restructuring of my debts with creditors, who have now acquired a share in the company and will enjoy the fruits of its growth in future years.
After the crash I was left for a time facing personal bankruptcy and the banks could well have foreclosed on me.  Bankruptcy would without doubt have meant that my assets would have been sold off at knock-down prices at short notice and consequently no settlement would have been possible with my creditors.  The restructuring agreements with the banks mean that it will now be possible to develop and sell the assets in the course of time at a fair and normal price. For instance, I have every hope that the holding in Actavis which now passes over to my creditors will not just pay off all my obligations to them in full but will grow beyond that.
In past years I took many decisions that I considered correct and reasonable at the time.  I wish to make it known that so far nothing has emerged that has provided cause for legal action against me or led to the annulment of agreements to which I am party.  On the contrary, it has been stated in the media that there are no grounds for such action either at Landsbanki or Straumur-Burðarás.  I am absolutely convinced that no such grounds will come to light, the more so since I do not believe that I have in any way acted in contravention of the law.
I have asked the people of Iceland for forgiveness for my evident mistakes in the events leading up to the collapse of the Icelandic banking system.  I repeat this apology.
With this restructuring and settlement of my debts my position becomes clear.  I still enjoy solid business connections with powerful banks outside Iceland and since the time of the crash my primary concern has been to start afresh in building things up, for instance by attracting foreign capital into Icelandic business and industry.   From now on, as in the past, my business ventures will be characterised by real transactions with real assets rather than  nominal transactions with imaginary assets – a state of affairs that was unfortunately all too common in Icelandic commercial life in years gone by.