- Exista's claims against Icelandic financial institutions


The OMX Nordic Stock Exchange in Iceland has requested that Exista hf. make
public information on the company's claims against Icelandic financial
institutions. The following information is provided by Exista in compliance
with that request. 

As of the date of this announcement, Exista estimates that the company's claims
against Icelandic banks total at least ISK 120-140 billion. The claims consist
primarily of deposits and unrealised gains from contractual agreements between
Exista and the Icelandic banks. As is well known, Exista carries out its
accounting in euros, but its assets and liabilities are composed of other
currencies as well, including Icelandic krónur, Norwegian krones, and British
pounds. Therefore the bulk of Exista's claims are based on the company's
hedging of its equity against fluctuations of other currencies against the
euro, its accounting currency. 

It is critical to emphasise that there is great uncertainty about whether
Exista's claims will be paid, either in whole or in part. In the wake of the
Financial Supervisory Authority's takeover of the Icelandic banks, the assets
and liabilities of the banks have been divided up into new companies and
subsidiaries, and in many instances it is not clear against what parties
Exista's claims will ultimately be directed. Also, there is substantial
uncertainty about the total amount of the final claims and on what exchange
rate assumptions the final settlement will be based. Counterbalancing the
claims against the Icelandic banks is Exista's debt to those same institutions,
totalling approximately ISK 125 billion. 

Exista wishes to reach an agreement with the Icelandic banks concerning a
comprehensive settlement of these obligations. Exista's debt with foreign
creditors totals around ISK 130 billion. Exista has been engaged in discussions
with its foreign creditors concerning a review of its loan agreements in light
of changed circumstances. These discussions have been constructive and are
proceeding in a positive manner, although no conclusions have been drawn as
yet. It is clear that it will have an extremely detrimental effect on the
company's operations if Exista's claims against the Icelandic banks are not
paid. Among other things, it is not possible to exclude the possibility that
the company's loans will be called in, either partially or in full. 

As before, Exista reiterates that its asset position is very unclear and that
the figures appearing in this notice are subject to considerable uncertainty.