DnB Nor will not give up on the NOK 1,5 billion loan they issued to the seven municipalities involved in the Terra scandal without a fight.
- If the municipalities decide not to honour the conditions of the loan, and pay back the instalments within the set deadlines, we’ll be forced to cancel the loan contract and demand that the municipalities pay back the entire loan immediately. If necessary we will take legal action to make sure that we get our money back, says CEO, Trond Bentestuen, in a press release.
The seven municipalities involved in the so-called Terra Scandal, informed the media on Monday that they do not intend to honour the loan commitments.
The municipalities argues that DnB Nor should have known that the loans were illegal.
- It is DnB NOR’s opinion that there is legal agreements that needs to be honoured by both parties, the bank writes in a press release.
- DnB NOR has not been involved in or offered any advise to the municipalities in relations to any of the financial investments made by the municipalities in this case. The municipalities will have to accept full responsibility, along with Terra Securities, for the consequences of their financial dispositions, the bank writes in the press release
Illegal
The Norwegian department of Justice has earlier concluded that the loans were illegal.
The municipalities borrowed approximately NOK 1,5 billion for investment purposes. After a liquidation sale and the Terra Securities bankruptcy, more than NOK 1 billion has been lost, and the municipalities are left with only NOK 434 million from the bankruptcy liquidation fund, which is the profits from the forced sale of the bank obligations.
The municipalities argues that DnB Nor has a responsibility to make sure that the loan agreements are in accordance with the law.
Not a big loss
In a worse case scenario DnB Nor will lose NOK 1 billion. This will lead to a loss of about 50 øre (approximately 10 cent US) in the value of DnB Nor stocks next year, according to Reuters, that are quoting an anonymous financial analyst.
- DnB NOR would probably contest this, but it is not a major drama for the bank. And it is definitely not a ‘killer’, the anonymous source tells Reuters.
The stock market is not concerned about the Terra Scandal. The DnB Nor stock rose by 1,9 percent to NOK 58,30, while the main index fell by 1 percent at the same time.
Source: e24.no
- If the municipalities decide not to honour the conditions of the loan, and pay back the instalments within the set deadlines, we’ll be forced to cancel the loan contract and demand that the municipalities pay back the entire loan immediately. If necessary we will take legal action to make sure that we get our money back, says CEO, Trond Bentestuen, in a press release.
The seven municipalities involved in the so-called Terra Scandal, informed the media on Monday that they do not intend to honour the loan commitments.
The municipalities argues that DnB Nor should have known that the loans were illegal.
- It is DnB NOR’s opinion that there is legal agreements that needs to be honoured by both parties, the bank writes in a press release.
- DnB NOR has not been involved in or offered any advise to the municipalities in relations to any of the financial investments made by the municipalities in this case. The municipalities will have to accept full responsibility, along with Terra Securities, for the consequences of their financial dispositions, the bank writes in the press release
Illegal
The Norwegian department of Justice has earlier concluded that the loans were illegal.
The municipalities borrowed approximately NOK 1,5 billion for investment purposes. After a liquidation sale and the Terra Securities bankruptcy, more than NOK 1 billion has been lost, and the municipalities are left with only NOK 434 million from the bankruptcy liquidation fund, which is the profits from the forced sale of the bank obligations.
The municipalities argues that DnB Nor has a responsibility to make sure that the loan agreements are in accordance with the law.
Not a big loss
In a worse case scenario DnB Nor will lose NOK 1 billion. This will lead to a loss of about 50 øre (approximately 10 cent US) in the value of DnB Nor stocks next year, according to Reuters, that are quoting an anonymous financial analyst.
- DnB NOR would probably contest this, but it is not a major drama for the bank. And it is definitely not a ‘killer’, the anonymous source tells Reuters.
The stock market is not concerned about the Terra Scandal. The DnB Nor stock rose by 1,9 percent to NOK 58,30, while the main index fell by 1 percent at the same time.
Source: e24.no
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