Stodir's moratorium extended
Today the District Court of Reykjavik approved Stodir‘s request for an extension to the moratorium until 6 April 2009. Stodir´s largest creditors had previously declared their support for the extension of the moratorium.
Stodir‘s management and the Company‘s administrator held a presentation for Stodir‘s creditors on 16 January. The presentation included preliminary information on Stodir’s current financial situation and a summary of developments during the last three months. During the past few months the management has focused on protecting the interest of its creditors. Stodir has attempted to divest some of the Company’s unlisted assets, but without success. The Company has also managed to hold off divesting its listed assets during a period of exceptionally low market value. A lot of work has been put into assisting companies in Stodir’s asset portfolio as Stodir’s current financial situation and the economical status of Iceland has put them in a difficult position. Stodir’s management team has had many meetings with the Company’s creditors, of which some are currently also in a moratorium or bankrupt, which has impeded the whole process considerably. For the past few months, the Company’s operations have been limited, the London office has been closed and all employees have been laid off. During the past weeks, a total of eight employees have worked for the Company.
Stodir’s asset portfolio has sustained a considerable setback during the past months after the Company was heavily impacted when the Icelandic government seized control of the Company’s largest asset, Glitnir. For the past six months the Company’s assets have decreased in value by approximately ISK 200 billion. According to preliminary evaluation of the total value of the Company’s assets at 31 December, the Company’s equity is negative by ISK 111 billion. It is therefore evident that if no actions are taken, the Company will become bankrupt.
At the meeting with creditors on 16 January, Stodir’s management team concluded that bankruptcy would not serve the creditors’ best interest. If bankrupt, the operations of companies in Stodir’s asset portfolio would be affected and the value of the Company’s assets would decrease significantly. The management team has presented the Company’s creditors with a draft of a plan to restructure the Company. The plan stipulates that the share capital of current shareholders would be written off entirely and that creditors would convert part of the Company’s debt into share capital. The extension of the moratorium enables the management team of Stodir to work further on restructuring the Company in close collaboration with its creditors.