Launch of a joint venture agreement with Bayrock Group LLC

FL Group announces that it has invested $50m in four active US-based real
estate development projects alongside Bayrock Group, a US-based international
real estate investment and development firm. 

These projects are:

• Trump Soho - The development of a 5 star hotel condominium in Soho,
Manhattan, in partnership with Donald Trump and the Sapir organization. 
• Trump Lauderdale - The development of a 5 star hotel condominium in
partnership with Donald Trump situated on Fort Lauderdale beach. 
• Whitestone New York - The development of 13 acres of land located along the
east river in Whitestone, Queens. Bayrock Group plans to build a number of
luxury homes and town homes on this land. 
• Camelback - The development of a 5 star hotel and residential condominium in

The lifetime of the projects is expected to be between two to three years.  The
investment will be funded with own funds and loans. 

Alfa Investment Consulting were a facilitator to the transaction and advisor to
Bayrock Group. 

FL Group has also formed a 50:50 joint venture agreement with Bayrock Group.
The new venture has been formed for investments in worldwide real estate
development projects. 

Commenting on the new venture, Hannes Smárason, CEO of FL Group said:

“This is a very exciting venture, which highlights FL Group's continued desire
to take advantage of new and unique opportunities. The real estate market is an
exciting, strong and competitive sector with great growth potential.  We look
forward to exploring this area with such a distinguished partner as Bayrock
Group both in the US and internationally when the possibilities arise. ” 

Tevfik Arif Chairman of Bayrock Group commented: 

“We are delighted to develop a partnership with FL Group and secure the support
of a financial partner with such excellent expertise. We look forward to
working with the first-rate team.” 

For further information:

FL Group:					
Kristján Kristjánsson
Director Corp. Communications 	
Tel: +354 591 4400 / 354 899 9352

Brunswick Group LLP				
Anita Scott, Leonora Pou
tel.  +44 (0)20 7404 5959

Bayrock Group:					
Mr. Felix Satter
Tel. +1 212 207 6650

Notes to Editors

About FL Group:
FL Group is an international investment company, focusing its activities on two
areas of investments. The company's Private Equity and strategic investments
focus on investments in public and private companies and has a long term view.
The company's Capital Markets unit oversees the company's short term trading as
well as derivative and security trading related to the company's asset
With its head office in Reykjavik and offices in Copenhagen and London, FL
Group invests in companies in Northern Europe, focusing primarily on the
Nordics and the UK but also has investments elsewhere. FL Group is listed on
the OMX Nordic Exchange in Reykjavik (OMX: FL). At the end of first quarter
2007 FL Group's total assets amounted to ISK 303 billion (EUR 3.4 billion). Its
market capitalisation at the end of March 2007 was ISK 236 billion (EUR 2.7
billion). The largest shareholders of FL Group are Oddaflug BV (19.8%), owned
by Hannes Smárason, CEO; Baugur Group (18.2%), Gnúpur fjárfestingafélag hf.
(17.2%), Icon and Materia Invest (10.7%). The shareholding can in some cases be
in the name of Icelandic financial institutions because of forward contracts.
More information on 

About Bayrock Group:
Bayrock Group, LLC is an international real estate investment and development
firm focused on top class real estate product throughout the world. Bayrock
Group's professional team combines countless years of experience in all aspects
of real estate development and has come together to create a world class team
of real estate development specialists.  Bayrock Group has made investments in
transactions comprising real estate assets valued in excess of $5 billion.