Moderna Finance AB - Company Announcement

- Milestones's foreign assets disposed of and domestic assets trasferred to Iceland

Moderna Finance AB, a subsidiary of Milestone ehf. in Sweden, has concluded
agreements for the sale of its insurance company Moderna Försäkringar and its
asset management company Aktie Ansvar. The company also intends to sell the
life insurance company Moderna Liv and the bank Banque Invik. Furthermore, the
company's Icelandic assets, which include Sjóvá, Askar Capital and Avant, will
be sold to Milestone and thereby will once more become owned by Icelandic
parties. These changes will not affect the operations of the Icelandic
companies. 

The disposal of Moderna Finance's assets has been concluded in consultation
with the Resolution Committee of Glitnir hf., which is Milestone's largest
creditor. The disposal of Moderna Finance's assets puts an end to plans for
financial restructuring of the Swedish Moderna Group, on which the company's
owners and Glitnir's Resolution Committee have been working in recent weeks. 

The restructuring, which was aimed at safeguarding creditors' interests,
required in part that Glitnir provide the companies with new capital to
refinance their loans. Due to steadily deteriorating market circumstances,
however, and a considerable lack of confidence on the part of Swedish parties
towards Icelandic ownership, these plans could not be realised and as a result
Glitnir will not provide the Swedish companies with new capital. 

Both the Resolution Committee and Milestone's management agree in the
assessment that, under the current circumstances, Icelandic interests are best
served by disposing of the foreign assets of the Moderna Group and transferring
its domestic assets back to the parent company in Iceland. 

The estimated sales value of the Moderna Group's foreign assets is considerably
lower than it was hoped could be obtained through financial restructuring and
the sale of assets at a later date. Milestone's management will, in coming
weeks, work on the company's financial restructuring in co-operation with its
principal creditors. 

Glitnir's Resolution Committee have worked diligently with Milestone's
management in recent months to ensure the best result for creditors. It is
therefore somewhat disappointing that the plans, to which considerable effort
has been devoted, will not achieve the desired results. 


FURTHER INFORMATION
Guðmundur Ólason, CEO Milestone:  (+354) 820 9788
Kristján Óskarsson, Resolution Committe of Glitnir Bank: (+354) 844 4411

Attachments:

milestone - press release 3 march 2009.pdf