Important step in the financial restructuring of BYR

Press releae No. 79/2009

The Ministry of Finance held meetings yesterday with the management of BYR Savings Bank, together with its advisors, and a number of creditor representatives.

At this meeting proposals were discussed regarding the basis for a government injection of new equity into BYR and the financial restructuring of BYR’s existing indebtedness to ensure that it meets regulatory requirement around capital measures. The Ministry believes that this is an important step to reaching final agreement and returning BYR to a sound financial footing.

The parties will continue their dialogue to finalise the proposed agreement at the beginning of new year.

This is consistent with the aim of the Ministry of Finance to support the restructuring of the savings banks system in Iceland. The Ministry was granted authorisation to inject capital into the savings banks in Iceland under the Act No 125/2008. Results regarding other saving banks can be expected in the near future.

The Ministry of Finance, December 14 2009