Agreements signed by Icelandic government and Kaupthing's resolution committee

Yet another stage in the rebuilding of New Kaupthing Bank hf. was reached today when the bank, the Icelandic government and the resolution committee of Kaupthing Bank signed agreements on the capitalization of the bank and settlement between the old and new banks.

The agreements also give the resolution committee, on behalf of the creditors, the option of acquiring 87% of the share capital in New Kaupthing with the government retaining the remaining 13%. The resolution committee has until 31 October to make a final decision on this. The agreements are contingent on the outcome of a due diligence review of New Kaupthing Bank and the approval of the Icelandic Financial Supervisory Authority and the Icelandic Competition Authority.

The signing of today's agreements is based on a framework agreement between the government and resolution committee which was announced on 20 July.

New Kaupthing Bank will continue to be entirely governed by Icelandic law and Icelandic supervisory institutions. The guarantee on deposits provided by the Icelandic authorities applies equally to New Kaupthing Bank and other domestic depository institutions.

Finnur Sveinbjörnsson, CEO of New Kaupthing Bank:
"The capitalization of the bank and the agreements with the resolution committee represent important steps in the process of rebuilding the bank for the benefit of its clients and society as a whole.

Changes will be made to the board of directors of the bank following the signing of the agreements. Kaupthing's resolution committee has nominated two board members who from today will have the same voting rights on the board of directors of New Kaupthing Bank as the four board members nominated by the government. The new board of directors will oversee the bank's activities until a final decision has been made on the bank's ownership.

The following people will serve on the new board of directors of the bank: Erna Bjarnadóttir new chairman, Helga Jónsdóttir, Drífa Sigfússdóttir, Jónína Sanders, Jóhannes Rúnar Jóhannsson and Theodór S. Sigurbergsson.

Hulda Dóra Styrmisdóttir, chairman, and Audur Finnbogadóttir are to leave the board of directors.

Hulda Dóra Styrmisdóttir, former chairman of the board of directors of New Kaupthing:
"Audur and I are now moving on to new jobs. The capitalization of the bank by the government was completed on 14 August and agreements have been reached on settlement between the old and new banks.

Now that this milestone has been reached we believe we have completed the task assigned to us by the government. A new chapter in the bank's history is about to begin and we wish the bank and the new board of directors the best of success for the future."