Skipti hf. - Company Announcement

Skipti in discussions with creditors on faster repayment of loans and review of terms

Skipti hf. is engaged in discussions with creditors with the aim of paying up
the company's debts faster than provided for in loan agreement terms. Skipti's
liquidity position is extremely strong, with the company holding a net cash
position of ISK 20 billion at the turn of the year. However, the company's
debts have increased with the fall of the Icelandic króna, as a part of the
company's borrowings are in foreign currencies.  Skipti had entered into
currency swap agreements with the Icelandic banks to hedge against the fall of
the króna, but the banks have failed to fulfil the contracts.  When the debts
increased, it was the assessment of the creditors that the terms of the loan
agreements had been disrupted, and they requested that Skipti should pay the
loans faster using its available cash. It should be noted that Skipti's loans
are all current. A conclusion is anticipated from the discussions within the
next few weeks.