Impoundment of Glitnir’s assets in Norway ends

This past week Glitnir’s assets in Norway, which have been impounded since the bank’s collapse last October, were released. The action gives the bank’s Resolution Committee unrestricted control over its assets in Norway, which are valued at around ISK 100 billion. According to the chairman of Glitnir’s Resolution Committee Árni Tómasson this is an important outcome, since it makes it clear that the bank will be able to fulfil all of its commitments in Norway and thereby maximise the value of assets. Furthermore, it ensures equal treatment of creditors, as those who demanded the impoundment in Norway must now, like all creditors, direct their claims to the bank's estate in liquidation in Iceland, where any disputes arising will be resolved by Icelandic courts.

Three parties originally demanded the impoundment of Glitnir’s assets in Norway, and Norwegian courts agreed to their demand. Glitnir’s Resolution Committee requested that the demand be submitted to a court for review in a case brought before a court of first instance in Trondheim in January this year. After the court rejected the demand for impoundment, the German bank KfW appealed the decision. Other creditors withdrew their demands for impoundment and when the time came for the case to be heard by the appellate court last week, KfW also withdrew its demand for impoundment. Subsequently all impoundment of Glitnir’s assets in Norway has now been removed.

For further information contact:
Árni Tómasson, Chairman of Glitnir's Resolution Committee: +354 898 2994

Glitnir’s Resolution Committee takes over share capital of Moderna Finance AB

Glitnir’s Resolution Committee has reached agreement with Milestone ehf., enforcing its charge on the entire share capital of Moderna Finance AB, a subsidiary of Milestone ehf. in Sweden. In so doing, the Resolution Committee acquires control of Moderna’s Icelandic subsidiaries Sjóvá, Askar Capital and Avant. Work continues on restructuring these companies and the agreement reached with the Resolution Committee is part of efforts to ensure their long-term operation. The actions will not affect the Icelandic companies’ day-to-day operations.

The agreement will not affect the sales process which had previously been initiated for the foreign assets of Moderna Finance AB. Árni Tómasson, chairman of Glitnir’s Resolution Committee has stated that the takeover of share capital of Moderna Finance AB is part of the normal continuation of the Committee’s work, after plans to restructure the Moderna group proved to be to no avail.

For further information contact:
Árni Tómasson, Chairman of Glitnir's Resolution Committee: +354 898 2994

Glitnir’s Resolution Committee Reaches Agreement on a Settlement for the Bank’s Luxembourg Subsidiary

Glitnir’s Resolution Committee and the Central Bank of Luxembourg (BCL) have signed an agreement providing for settlement of debts for Glitnir’s subsidiary, Glitnir Bank Luxembourg S.A. BCL is part of the network of European central banks in member countries of the Eurosystem. Negotiations have been underway since Glitnir Bank Luxembourg S.A. was placed under a suspension of payments mode in early October. This agreement will facilitate Glitnir’s Luxembourg subsidiary to be placed into a voluntary and solvent liquidation.

The agreement means that important interests of Glitnir and its customers will be safeguarded; the Luxembourg subsidiary will have a period of up to five years within which to maximise the value of its assets and repay all debts owed to BCL. The agreement also foresees that securitised loan portfolios, pledged to BCL, and which include, for instance, loans to Glitnir’s Icelandic customers, will continue to be administered by Glitnir’s Resolution Committee. According to the agreement, proceeds from the corporate loan portfolio of Glitnir Bank Luxembourg are furthermore to be used to repay debts to BCL. The portfolio principally includes mortgages on commercial and residential real estate in the Nordic countries, the UK and Germany.

A proposal for a settlement with creditors has been presented to all creditors for voting on 16 March 2009. According to this proposal, creditors other than BCL will receive payment of their claims of principal; the agreement was therefore a basic prerequisite enabling a favourable resolution of outstanding issues at Glitnir Bank Luxembourg. The proposal also foresees that all customer deposits will be repaid in the near future. This move also eliminates uncertainty for the Bank’s employees in Luxembourg, as it will ensure them their legal and contractual rights concerning termination of employment, which would not have been the case had the bank gone into receivership.

Árni Tómasson, chairman of Glitnir’s Resolution Committee: “I am very pleased that the situation at Glitnir Bank Luxembourg has now been settled to the satisfaction of both parties, and giving us leeway to work on resolving these complicated issues in a manner which will safeguard the interests of all parties optimally.”

For further information contact:
Kristján Óskarsson, Resolution Committee of Glitnir: +354 844 4411

Milestone’s Foreign Assets Disposed of and Domestic Assets Transferred 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 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 leaders 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.

For further information contact:
Guðmundur Ólason, CEO of Milestone: +354 820 9788
Kristján Óskarsson, Resolution Committee of Glitnir: +354 844 4411

On 19 February 2009 the District Court of Reykjavik ruled in favour of Old Glitnir’s request for an extension to the Moratorium order originally granted on 24 November 2008. The extension period is to end on 13 November 2009.

For the avoidance of doubt, New Glitnir banki hf, which assumed the domestic Icelandic operations of Old Glitnir on 14 October 2008, is completely unaffected by the Moratorium and will continue to provide a full service to its clients in Iceland.

For and on behalf of
The Resolution Committee of Old Glitnir

The Resolution Committee of Old Glitnir is pleased to announce the appointment of UBS Securities LLC (“UBS”) to act as financial and capital markets advisor to the Resolution Committee in connection with certain matters relating to the restructuring of Old Glitnir. UBS’ assistance to the Resolution Committee of Old Glitnir will include reviewing and analysing potential alternatives to the financial instrument to be issued by New Glitnir banki hf (“New Glitnir”) to Old Glitnir reviewing and analysing the strategic alternatives that may be available to Old Glitnir, and advising on the maximisation of Old Glitnir’s assets.

UBS anticipates, as part of its responsibilities to the Resolution Committee, consulting with major creditors of Old Glitnir, including members of the Informal Creditors Committee

The Resolution Committee looks forward to working with UBS and will provide further updates on the status and outcome of their work at the appropriate time.

For and on behalf of
The Resolution Committee of Old Glitnir

On 24 November 2008 the District Court of Reykjavik granted a Moratorium order on Old Glitnir. The Moratorium is not a bankruptcy proceeding and does not affect Old Glitnir's banking licences or its ability to operate as a bank in those jurisdictions where that is appropriate. Rather it is a specialised proceeding under Icelandic law designed to provide Old Glitnirwith appropriate global protection from legal action taken, or anticipated to be taken, by its creditors.

The Moratorium order will ensure that all creditors of Old Glitnir are treated fairly and appropriately under Icelandic law and EEA directives. It will also give Old Glitnir time to consider all strategic alternatives including an arrangement with its creditors that will permit Old Glitnir to emerge from the Moratorium as a going concern. In order to allow for due consideration of those alternatives, the Resolution Committee has no intention of selling significant assets other than in exceptional circumstances. The Resolution Committee believes that retaining and managing the assets of Old Glitnir will maximise the value of those assets, and will support a restructuring of Old Glitnir and its emergence from the Moratorium procedure.

Steinunn Gudbjartsdottir, supreme court attorney, a former member of the Glitnir Resolution Committee, has been appointed Moratorium Administrator, reporting to the District Court of Reykjavik, and will supervise the actions taken by the Resolution Committee.

Old Glitnir's Resolution Committee has begun meeting with representatives of its creditors to solicit their input on strategic alternatives and Steinunn has indicated her desire to have those discussions continue. Many of Old Glitnir's creditors have expressed support for this process and the Resolution Committee expects it to continue during the Moratorium period. The Resolution Committee's goal is to work with representatives of its creditors towards a negotiated framework for maximising Old Glitnir's ability to repay its creditors over time.

For the avoidance of doubt, New Glitnir banki hf, which assumed the domestic Icelandic operations of Old Glitnir on 14 October 2008, is completely unaffected by the Moratorium and will continue to provide a full service to its clients in Iceland.

For and on behalf of
The Resolution Committee of Old Glitnir

The Resolution Committee of GlitnirBanki hf. („Old Glitnir“), has appointed Kristjan Davidsson as Managing Director. Mr. Davidsson formerly acted as Managing Director within Old Glitnir‘s Global Seafood division. He will work closely with the Resolution Committee, Old Glitnir‘s employees and advisors.

For and on behalf of
The Resolution Committee of Old Glitnir

The Resolution Committee of Old Glitnir today held the first meeting of the Informal Creditors’ Committee (the “ICC”), made up of representatives of key creditors of Old Glitnir. The meeting proved constructive and covered a broad range of topics. Further information in respect of the meeting will be made available on the website (www.glitnirbank.com) in due course. It is anticipated that the next meeting will be held within one month.

The Resolution Committee looks forward to working closely with the ICC towards a solution that maximises recovery for all stakeholders.

For and on behalf of
The Resolution Committee of Old Glitnir

The Resolution Committee of Old Glitnir are pleased to announce the appointment of the UK limited liability partnership of Deloitte & Touche LLP (“Deloitte”) to assist with the communication and consultation with all remaining creditors of Old Glitnir including its international branches, following the transfer of all of Old Glitnir’s deposits in Iceland into New Glitnir Bank hf, as announced on 15 October 2008.

It is the Resolution Committee's intention to provide regular update information to all creditors of Old Glitnir through a dedicated website, details of which will be announced shortly.

Deloitte will be assisting the Old Glitnir Resolution Committee to set up an informal committee of creditors representing a broad cross section of financial institutions, international deposit holders, and other creditors. Subject to the creditors' committee members entering into strict confidentiality undertakings, the Resolution Committee, with the assistance of Deloitte, intend to consult with the creditors' committee on their plans for realising the assets of Old Glitnir and making payments to creditors. In this regard, contact will be made with known creditors of Old Glitnir over the next few days.

Those creditors of Old Glitnir wishing to register their interest in this regard are invited to contact Old Glitnir through the following email address creditorcontact@glitnirbank.com

For and on behalf of:
The Resolution Committee of Old Glitnir