Icelandair Group (“the Company”) and Bain Capital have today, 23 June 2021, reached a binding agreement whereby Bain Capital will subscribe to total of 5,659,094,470 new shares (the „New Shares“) in Icelandair Group at a price of ISK 1.43 per share for a total consideration of ISK 8,092,505,092 (equivalent to USD 66.1 million). The transaction corresponds to a 16.6% stake in the Company once the New Shares have been issued. The agreement is subject to the Company’s Shareholders’ Meeting agreeing to the transaction and thereby waiving shareholders’ pre-emptive rights to the New Shares. The agreement is further conditioned upon the election of Bain Capital’s representative to the Company’s Board of Directors. The Company expects to call a Shareholders’ Meeting on 23 July 2021. Úlfar Steindórsson will step down as a board member from the date of the shareholders’ meeting subject to approval of the transaction. The New Shares are subject to a 180-day lock-up period that will commence on the date of the New Shares being admitted to trading on the Nasdaq Iceland Main Market.

In addition to the New Shares, Bain Capital will receive a warrant for subscription rights amounting to 25% of the number of New Shares now purchased. The warrant will be exercisable during a ten-day period immediately following the publishing of the Company’s Q2 2022 results. The warrant allows Bain Capital to purchase new ordinary shares in the Company at a price equaling the price per share of the New Shares plus 15% annual interest.

The capital increase will further strengthen Icelandair Group’s financial position increasing its capabilities of seizing opportunities in the current unprecedented operational conditions.

Bogi Nils Bogason, President and CEO of Icelandair Group

“It is with great enthusiasm that we welcome the anticipated addition of Bain Capital to our strong and diverse group of shareholders. We are pleased to have a leading global investor with deep industry knowledge recognize our efforts and commitment to secure Icelandair’s bright future. We look forward to working with them to bring to fruition the many opportunities we see for Icelandair Group´s winning business model in the post-Covid era where Iceland, the Company’s hub and home, will continue to be an exciting travel destination.”

Matthew Evans, Managing Director, Bain Capital Credit

“We are excited to add Icelandair Group to our diverse portfolio of aviation assets and to support Iceland’s flag carrier in the next chapter of its 84-year history. While a fulsome recovery of the global travel and tourism market is likely to take some time, we share the management team’s belief that Icelandair has a highly competitive business model built for long-term success along with a strong operational track record, making the Company well-positioned to capitalize on attractive opportunities arising as the recovery progresses. We are confident our experience across the aviation ecosystem and value-added approach will help grow the Company for the benefit of all stakeholders.”