From Iceland — Government Risk Over Farice Loan "Significant"

Government Risk Over Farice Loan “Significant”

Published November 25, 2015

Andie Sophia Fontaine
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The National Archives

The Icelandic National Audit Office believes the government is taking a “significant risk” due to their part ownership of a loan owed by Farice ehf., the company which maintains the undersea internet cable between Iceland and Europe.

Although Farice’s financial situation has greatly improved in recent years, RÚV reports, they are still some 8.3 billion ISK in debt. The Icelandic government, as 85% owner of Farice, therefore owes some 7 billion ISK of that.

Farice’s financial difficulties go back to at least 2010, and concern over liquid assets came to the surface in 2012. At that time, Farice provided assurances that Iceland’s internet connection was in no danger of being cut off if loan payments could not be made.

The follow-up report, which was newly published, shows that the issue has developed in such a way that it is not considered necessary to reiterate indications. However, the government still needs to cover its share of the losses, and solutions need to be found to bring Farice out of the red.

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