Frá vinstri: Björgólfur Jóhannsson, Sigurður Helgason, Ágúst Einarsson og Finnbogi JónssonThe Enterprise Investment Fund has buy a 30% stake in Icelandair Group and is envesting a total of ISK 3 billion in the company. Prior to this transaction, Íslandsbanki owned a 48% holding in Icelandair Group, but following a share capital increase, the bank’s share will be dilluted to 30%.

According to a binding agreement concluded with Icelandair Group hf., the Fund will invest ISK 3 billion in the company. The agreement is subjected to the customary requirement concerning the resuslt of the due diligence analyses, wich will be carried out on behalf of the Fund.

The Fund will subscribe for 1.2 billion new shares at a share price of 2.5, for a total investment of ISK 3 billion. With this agreement, Icelandair Group pledges to acquire new share capital in the amount of ISK 1 billion market value, at the same share price, before 31 July 2010 It is expected that shares will be sold for a total of ISK 5 billion.

The agreement assumes that Icelandair Group’s largest creditors will convert debt in the amount of ISK 3.6 billion into share capital at a share price of 5, so that they will subscribe for 720 million new shares. The sale price of the share capital increase will therefore total ISK 8.6 billion.

As was stated in the announcement to the Nasdaq OMX Iceland stock exchange (OMX ICE) on 25 March 2010, the company’s financial restructuring is expected to reduce its debt by over ISK 10 billion, in part through the transfer and sale of specified assets outside its core operations. None of the group’s debt will be written off.

Since the latter half of 2008, Icelandair Group has worked closely with Íslandsbanki and other creditors on financial restructuring. This agreement marks an important milestone in the restructuring process and secures the company’s financial position.