Since the beginning of November 2008, the main lenders to Nysir hf., have collectively supervised the restructuring of the company to preserve the value of Nysir and its subsidiaries in accordance with the London Approach, which details widely approved procedures regarding out of court workouts of distressed companies. The guiding principle for the main lenders, as per the London Approach, was that this informal process should ensure that the stakeholder's position would yield better results than other alternatives, such as entering into a formal bankruptcy process. According to Nysir‘s main senior and junior lenders, the restructuring process over the past few months, has clearly demonstrated the importance of open collaboration between creditors within distressed situations. Subsequent to this informal restructuring process, discussions between the owners of Nysir hf. and the company‘s main lenders, NBI hf., Landsbanki Íslands hf., Nýi Glitnir Banki hf., Nýi Kaupþing Banki hf., SPRON, Byr and others, the lenders have now acquired all shareholdings in Nysir hf. Following the lenders formal involvement in the company‘s daily operations, the new owners will now continue the company‘s restructuring and divest of non-performing or troubled assets with the intent of securing the company‘s going concern but it is clear that the massive devaluation of the Icelandic Krona, coupled with high inflation in Iceland and the current economic difficulties, has led to significant deterioration of Nysir's net assets. It should be noted that the former owners of Nysir, in collaboration with the company's senior and junior lenders, have already finalized the sale of Nysir's shareholdings in Meritum (the parent company of Midi.is in Iceland and Billetlugen APS in Denmark) to Straumur Burdarass Investment Bank and initiated bankruptcy proceedings for Nysir Fasteignir hf., (the parent company of Nysir's main real estate investments in Iceland) but the company's debt position has significantly worsened over the past year with current loan defaults being beyond repair. Negotiations are also ongoing regarding Nysir's development projects on the eastern front of Reykjavik's harbor and the company's subsidiaries in the United Kingdom With the formal takeover of the Nysir, a new phase has been initiated in the company's restructuring and the main lenders hope to have formalized the final ownership of Nysir as well as the composition of the company's assets over the next 2-3 months. The company's former owners have now left their respective positions within the firm and the new CEO, Haraldur L. Haraldsson has been instated. For further information, please contact Haraldur L. Haraldsson, CEO Haraldur Haraldsson: hlh@nysir.is