Orkuveita Reykjavíkur - Company Announcement

Financial Ties Between Reykjavik Energy and Reykjavik Fiber Network Loosened

Reykjavik, 2014-03-28 16:58 CET (GLOBE NEWSWIRE) -- Reykjavik Energy's (RE -
Orkuveita Reykjavikur) has increased its shares in Reykjavik Fiber Network (RFN
- Gagnaveita Reykjavikur) by ISK 3.5 billion, an amount that will be subtracted
from RE's loan to RFN. RFN intends to refinance outstanding debt to RE on the
general market. By this, financial ties between RE and its wholly owned
subsidiary are loosened and RE's cash position improves. The transaction has
been approved by the Icelandic Post and Telecom Administration, as announced
today. 

Following a thorough debate among RE's owners, they decided in October 2012 to
launch the process of selling 49% of shares in RFN, now entirely owned by RE. A
part of that process is the financial reorganization of RFN. 

In June 2013, RE‘s Board of Directors decided to change up to ISK 4 billion of
the debt to equity should the remainder of the loan be paid in full. Thus,
financial ties between RE and RFN are slackened before the intended sale of
shares. RE's cash increases by the amount paid up. 

RE's Board of Directors' decision was made pending the Icelandic Post and
Telecom Administration's approval. That has now been granted and a RFN
share-holder meeting today approved the transactions.