Iceland finalises Landsbanki recapitalisation deal

* Icelandic govt to take 81 percent stake in new Landsbanki

* Iceland to contribute 122 billion ISK to recapitalisation

* New Landsbanki to issue 260 bln ISK debt to old bank

STOCKHOLM, Dec 16 (Reuters) - The Icelandic government said on Wednesday it had finalised a deal with creditors of failed bank Landsbanki as part of the recapitalisation of its shattered banking system following last year's collapse.

The Icelandic Ministry of Finance said in a statement the state would take an 81 percent stake in the new bank formed out of the wreckage of Landsbanki, recapitalising the bank with an equity contribution of 122 billion Icelandic crowns.

"The announcement marks the final step by the government in recapitalising the three new banks and therefore securing a stable banking system for Iceland," it said. The Icelandic crown is not fully tradable due to the rigid currency controls imposed after Iceland's financial meltdown, but based on the central bank's on-shore exchange rate the state's equity contribution would total just under $1 billion.

Iceland's top banks -- Kaupthing, Glitnir and Landsbanki -- were brought down by the global financial crisis last October, plunging the economy into deep recession and forcing the nation to seek billions of dollars in aid from the International Monetary Fund and other lenders.

The North Atlantic island nation has already struck deals with the resolution committees of Kaupthing and Glitnir which left creditors with majority stakes in the banks formed out of the ashes of the old ones. [ID:nGEE5B01US] [ID:nLF666194]

Under the terms of the agreement with the Landsbanki resolution committee, the creditor-controlled old bank would receive a 10-year debt instrument of 260 billion crowns as well as a 19 percent equity stake in the new bank.

"Together the debt instrument and the share capital compensation are equivalent to the assessment by the new bank of the assets taken over net of liabilities," the government said.

If the value of the assets transferred to the new bank was to prove higher than assumed once a final assessment was made at the end of 2012, a further debt issue of up to 92 billion crowns would be made to the old bank, it added.

The government outlined plans in July to recapitalise the nation's banks at a cost of about 270 billion crowns but said that this would be cut to about 200 billion if creditors of the old banks accepted stakes in the new ones. [ID:nLK407886] (Reporting by Niklas Pollard; editing by Stephen Nisbet)