Depositors and bondholders in the collapsed Kaupthing Singer & Friedlander Isle of Man bank are to be offered a £350m compensation package by the island's government and banks, it was reported yesterday.
More than 8000 savers and investors, mainly British, stand to lose £800m in the liquidation of the Icelandic offshore bank, which has been twice postponed to enable talks about some form of rescue.
The report said the package would use government and bank contributions to enhance the island's existing compensation scheme, and add to any available assets from the provisional liquidation of the company. The government's maximum contribution would be £150m and that of the banks £200m. A similar scheme in Guernsey has been funded with £100m.
The IoM government said it was working with the provisional liquidator to achieve the "best possible outcome" for depositors, and expected an indicative value of the bank's assets to be announced in mid-January.
An insurance industry spokesman said all depositors, including life insurance company policyholders, could expect to do "significantly better" from the rescue package.
The IoM government is also understood to be planning to provide immediate emergency pay-outs of around £1000 to help small depositors in cases of hardship.
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