Klakki

Klakki to sell a majority of VÍS shares

13.03 2013

The Board of Klakki ehf. has decided to offer at least 60% of shares in VÍS for sale in an offering planned for April. The Board of VÍS has applied to the NASDAQ OMX Exchange in Iceland (OMXICE) to have the shares admitted for trading on the OMXICE Main List. Arion Bank Corporate Finance is supervising the planned sale and associated processes.

As Iceland’s largest insurance firm, with a market share of over one-third, VÍS is a strong and sound company that represents an interesting investment option. As is stated in VÍS’ annual report for 2012, premiums totalled ISK 16.5 bn during the year and are very well diversified among insurance types and customers, with no single customer of the total of over 80,000 representing more than 1% of total premiums. Assets were valued at ISK 43.5 bn at year-end 2012, and equity was ISK 14.5 bn. Operations were strong in 2012, generating a profit of over ISK 3.0 bn. As is stated in Note no. 34 to the financial statements, the SPRON winding-up committee filed suit against VÍS last year, demanding rescission of SPRON’s repayment in October 2008 of an ISK 2 bn money market loan granted by VÍS to SPRON in September 2008. The Boards of Klakki and VÍS consider the SPRON winding-up committee’s case to be based on weak grounds, but in order to reduce uncertainty about the effects of this case on VÍS share values and equity position, Klakki will pledge, concurrent with the sale to investors and the listing on OMXICE, to contribute capital to VÍS in the event that VÍS is instructed by the court to repay this amount.

As is stated above, the share capital offering is intended to include at least 60% of issued VÍS shares. It is expected that about 10% will be offered to investors wishing to purchase holdings valued at ISK 0.1-50 m, and 30% will be offered to investors subscribing for holdings valued over ISK 50 m, but these shares will all be sold at the same final offering price, which will be within a prescribed range. In addition, it is assumed that 10% will be offered to investors by subscription to just under 2.5% of shares. These shares will be sold to the highest bidders. Moreover, an additional 10% will be allocated to the above bidding process, depending on demand. Further information on VÍS and the structure of the offering will be made public concurrent with the publication of the VÍS prospectus.

VÍS is a strong, reliable company with deep roots in Icelandic society and a long, successful history of operations. As such, it is an excellent candidate for listing on the OMXICE exchange. In Klakki’s opinion, internal and external conditions are beneficial for sale at this time, and Klakki’s objective is that the share capital offering shall form the basis for diversified ownership of VÍS by both general and institutional investors. Klakki does not intend to sell any individual investors an effective share in the company, as the purchase of 10% or more of an insurance company’s shares is subject to approval by the Financial Supervisory Authority. Listing the company’s shares on OMXICE promotes increased liquidity and more effective price formation for the company’s issued securities; it also contributes to diversified ownership and increased accessibility of information on the company to shareholders, customers, and the general public.

Further information can be obtained from:

Magnús Scheving Thorsteinsson, CEO, Klakki – tel: +354 774-7678 - mst@klakki.is

Þórbergur Guðjónsson, Arion Bank Corporate Finance – tel: +354 856-6823 - thorbergur.gudjonsson@arionbanki.is

Back

Older announcements