FL Group to sell off 51% of Icelandair by year end

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Details of FL Group's plan to spin off Icelandair were revealed yesterday by Glitnir, an Icelandic bank that will underwrite an offering of 51% of the carrier.

The sale is expected to net FL Group ISK26 billion ($364.1 million). Icelandair Group, which employs 2,700, will be listed on the Iceland Stock Exchange by the end of 2006, Glitnir said, with a public share offering to occur prior to the listing. It said the enterprise value of Icelandair Group is ISK43 billion.

"This agreement is outstanding for all parties involved and FL Group is realizing a substantial profit from the sale of Icelandair Group," FL CEO Hannes Smarason said. "This transaction and the plans that are on the table create significant flexibility for further investments for FL Group. We have emphasized that Icelandair Group, the country's most important transport company, and a leading international player in the airline industry, would be in public hands."

Glitnir said it "already has buyers for a large part of the share the bank underwrites."

Employees of the airline group will have the opportunity to purchase shares, and the stakeholders said Icelandair Group operations "will continue on all levels as normal," with no plans to change management or reduce the workforce.

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