Icelandair Group hf.: The Financial Restructuring of Icelandair Group

The Board of Directors of Icelandair Group (or the “Company”) has submitted a proposal to the Shareholder’s Meeting that, if approved, would enable the Board to increase the share capital of the Company by up to 30,000 million new shares. Subject to the approval of a Shareholder’s Meeting, the Board aims to offer new shares in the Company (the “Offering”), in June.  The Board aims to publish a Prospectus and publicly announce the price of the new shares, along with the terms and conditions of the Offering, subsequent to the Shareholders’ Meeting.

The Board further proposes that current shareholders waive their pre-emptive rights to the new shares. The public, along with other investors, will thereby be given the opportunity to subscribe to new shares in the Company. Furthermore, the Board will have unilateral authority to determine the allocation of new shares, but efforts will made to provide full allotment to existing shareholders and employees. The objective of the Offering is to raise up to USD 200 million in equity for the Company. Additionally, the Company aims to explore the possibility of converting liabilities to equity.

The offering is an important part of the financial restructuring of Icelandair Group. The Company has announced changes in organizational structure and will continue to identify and implement actions and processes aimed towards strengthening the long-term competitiveness of all aspects of the Company. Icelandair Group has been in close contact with the Icelandic Government during the process. Today it was announced that the Government is willing to consider granting the Company a credit line or providing a guarantee for such credit line conditioned upon the completion of the share offering. The Company expects that further conditions from the Government regarding the credit line will be required.