March 19 (Reuters) - Iceland's Arion Bank said Kaupskil ehf, a unit of Kaupthing, has agreed to sell 582.9 million shares of Arion Bank for more than 48.8 billion kronas ($450.7 million).
Arion said the private placement reduces Kaupthing's stake to 57.9 percent of Arion's issued share capital.
Proceeds from the transaction will be used for prepaying the 84 billion kronas secured note held by the Icelandic Treasury, the company said. bit.ly/2mYyXpP
Iceland's government had confirmed its plans last month to sell its minority stake in Arion Bank in an initial public offering.
Kaupthing, now a holding company that owns 87 percent of Arion Bank, has been working on plans for a stock market listing of Arion which could take place as early as April, people close to the matter told Reuters in January.
The domestic operations of Kaupthing, once a major international bank, were separated in 2009 into Arion Bank, which has insurance, asset management and retail banking assets. ($1 = 108.2700 Icelandic Crowns) (Reporting by Gaurika Juneja in Bengaluru; Editing by Gopakumar Warrier)