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Improved outlook for Kaupthing Singer & Friedlander IOM depositors 24 April 2009 THE Isle of Man Government has welcomed new information from the UK arm of Kaupthing Singer & Friedlander which could mean quicker and higher recoveries for depositors with the bank in the Isle of Man. Ernst & Young, administrators of the UK bank, this week issued an interim report indicating a possible overall recovery rate of at least 50 per cent for creditors of the UK bank. This is higher than anticipated by the Isle of Man Government, and moves the estimated minimum recovery rate for the local bank from 65 per cent to about 75 per cent. The improved prospect of returns from the UK could accelerate repayments under the proposed Scheme of Arrangement for Isle of Man depositors, so that individual entitlements of up to £50,000 could be paid in full in 12 months instead of 24 months. With higher dividends expected, the outlook for larger depositors would be better too. The Isle of Man Treasury has agreed to further defer its ‘catch-up dividend’ from 60 pence in the pound to 70 pence in the pound – which means it would get nothing back under the Scheme of Arrangement until all others creditors had received at least 70 per cent of their claims. The Scheme of Arrangement has been amended to reflect the latest information from the UK. The revised Scheme and other information are expected to be issued to depositors next week ahead of their vote on the proposal on May 19. If approved, the High Court will be asked to sanction the Scheme on May 27. Treasury Minister Allan Bell MHK said: ‘A degree of clarity at last on recoveries that might be expected from KSF in the UK is indeed welcome. The 50 per cent minimum indication is still low, which justifies our cautious approach, but it is better than working estimates so far. However, we note that this is dependent on the state of the UK economy.’ The Scheme of Arrangement, an alternative to liquidation of the company and activation of the Island’s Depositors Compensation Scheme, is designed to provide assured scheduled repayments underpinned by funding from the Treasury, which has £180 million in place to support the Scheme. More stories >>>
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