Nýherji hf. - Company Announcement

Nýherji hf. increases share capital by ISK 840 million at market value and signs agreements with Arion Bank and Islandsbanki.

The Board of Directors of Nýherji hf. has decided to utilize the authorization
of the annual general meeting last February to increase the company's share
capital by ISK 120 million at nominal par. The company has signed agreements
with investors on the purchase of this share capital at an exchange rate of
7.0, and the total sales value is therefore ISK 840 million. This week share
capital in the amount of ISK 28 million at par value will be registered with
Icelandic Securities Depository, and share capital in the amount of ISK 92
million will be registered in December. About half of the share capital
increase comes from new shareholders. After the increase in December, the
company's issued share capital will be ISK 400 million at nominal par. 

Nýherji has also signed agreements with Arion Bank, on one hand, and
Islandsbanki, on the other, on reorganization of the company's long-term loans,
where the payment period will again be normal. 

In order to further lower the company's debt, Nýherji has entered into an
agreement on the sale of the company's real-estate at Borgartún 37, and the
sales price is ISK 1650 million, which will generate sales profit in the amount
of ISK 82 million. In parallel with this, the company has signed a 15-year
lease agreement for Borgartún 37. 

Because of debt restructuring from foreign to domestic loans, the loan
principal will decrease. The overall effect of this decrease and the
aforementioned sale of Borgartún 37 is after-tax profit of about ISK 150
million, based on the position at the end of Q2 2010. 

The overall impact of the measures is that the company's equity capital will be
strengthened by nearly ISK 1 billion in 2010. At the conclusion of these
measures, Nýherji's financial position will again be strong, and the company's
equity ratio will be over 30% at the end of the year.  Also, the cash position
and the company's current ratio will again be normal. After the agreements the
company's interest-bearing debt will be about ISK 2.6 billion. The loan payment
periods will range from 7 to 15 years. Interest-bearing debt has also been
halved since 30 June 2010. "The operations of Nýherji and its subsidiaries have been strengthened in
recent quarters, and the prospects are good for still better performance of the
group's operations in the next several quarters. In Q2 EBITDA from the
company's operations was ISK 123 million, but next year's plans call for it to
be about ISK 160 million on average per quarter. With the above-specified
changes, the company will recoup its previous financial strength, in parallel
with achieving good operational performance," according to Nýherji's CEO
Thordur Sverrisson. 


Further information:
Thordur Sverrisson, CEO Nýherji, Tel. +354 893 3630.

Attachments:

ensk fréttatilkynning frá nýherja hf. 29.9.2010.pdf