-Placement oversubscribed due to strong investor demand- Reykjavik, Iceland, 14 December, 2007 - FL Group (OMX: FL), the international investment company, today announced that it has successfully completed a private placement of shares to Icelandic institutional investors. The gross proceeds from the placement is ISK 15 billion, but as previously announced, new shares offered were valued at ISK 10 billion, but if oversubscribed, the amount can be increased up to ISK 15 billion. Total subscription amounted to ISK 20.6 billion. In the offering, 680,272,109 new shares were sold at ISK 14.7 per share to institutional investors in Iceland. The new shares represent 7.36% of FL Group's total issued share capital, which stands at 9,925,000,682 shares, following the private placement. In addition to the new shares sold, Baugur Group sells shares valued at ISK 5 billion in the placement, which is according to the agreement made between Baugur Group and FL Group in relation to the acquisition of a property portfolio, announced 4 December 2007. The new shares are expected to be admitted to trading on OMX Nordic Exchange in Iceland no later than Thursday 27 December 2007. As of that date, the shares will be delivered to investors who have paid the respective purchase price. Investors shall pay for the shares no later than Friday, 4 January 2008. Following the private placement and when Baugur Group has been alloted new shares in FL Group in accordance with the agreement made between Baugur Group and FL, the five largest shareholders (ownership based on holdings on 14 December in addition to new shares from placement) will be the following: Baugur Group hf. (BG Capital) 36.47% Gnupur fjarfestingafelag hf. 12.05% Oddaflug B.V. 10.86% Materia Invest ehf. 6.28% Fons hf. 6.13% FL Group intends to sell new share capital worth up to ISK 3 billion in a rights issue to the company's shareholders during the first quarter of 2008, at the same prices as the completed placement. The record date for the rights issue will be announced after the company´s fourth quarter results, which is expected in the first week of February. The private placement was managed by Kaupthing Bank Jon Sigurdsson, Chief Executive Officer of FL Group said: ”The exceptional results from the private placement are a clear sign of investors' confidence in FL Group and its strategy. Our investment portfolio is well diversified and fundamentals remain strong and despite recent turbulence in financial markets, we believe that our portfolio offers strong long term value potential. FL Group´s financial capacity is stronger than ever before and we are well positioned to explore new growth opportunities, as well as continue our support to current core investments.” Further information: Halldór Kristmannsson Managing Director of Corporate Communications & IR, FL Group Telephone: +354 591 4400 E-mail: halldor@flgroup.is Thorolfur Jonsson Managing Director of Investment Banking, Kaupthing Bank Telephone: +354 444 6000 E-mail: thorolfur.jonsson@kaupthing.com About FL Group FL Group is an international investment company focusing on three areas of investment, Financial and Insurance (FIG), Private Equity and Capital Markets. FIG is a special investment function responsible for strategic investments in banking, insurance and other financials. Private Equity oversees FL Group‘s private equity holdings in addition to some listed positions that fit specific investment criteria. The company's Capital Markets function oversees investments in listed securities as well as derivatives and other alternative trading for hedging or investment purposes. With head office in Reykjavik and an office in London, FL Group invests in companies worldwide. The Company is listed on the OMX Nordic Exchange in Iceland (OMX: FL), with over 4,000 shareholders. More information on www.flgroup.is