Resolution to authorise the increase of share capital approved at EGM

At an Extraordinary General Meeting of Bakkavör Group hf., held today on 28th of October 2004 at 8:15, the Board of Directors of the Company was authorised to increase the share capital of the Company by up to ISK 750 million nominal value through sale of new shares with pre-emptive rights to the shareholders. The Board was also authorised to increase the share capital by up to ISK 40 million nominal value through the sale of new shares to employees of the Company or parties related to the Company.

It is indicated that shares are traded without pre-emptive rights for participation in a share issue after the Board of Directors decides to increase the share capital. Those shareholders who own shares at the time of the Board´s resolution and are listed as shareholders in the register of shares when that list has been updated in relation to that time, are entitled to subscribe to new shares in proportion to their shareholdings, cf. article 34 of the Icelandic Companies Act no. 2/1995.The authorisation to increase the share capital was given by the following amendments to the Articles of Association of the Company. The two paragraphs here under are added to Article 3 and other articles will change accordingly, besides that in Article 25 there will be the following paragraph:

“These articles were approved at an Extraordinary General Meeting on 28th of October, 2004.”“The Board of Directors of the Company is authorised to increase the share capital of the Company by up to ISK 750.000.000 nominal value through the subscription of new shares. Shareholders in the Company shall have pre-emptive subscription rights to the new shares in proportion to their shareholdings in the Company. There will be no restrictions on trading in the new shares. They shall grant rights in the Company from the date of registration of the increase in share capital to which they pertain. The Board of Directors shall decide the offer price, payment terms and stages of exercise of the authorisation. The authorisation shall be effective until 28th of October 2009, to the extent that it has not been exercised before that date. The new shares shall belong to the same class and carry the same rights as other shares in the Company.

”“The Board of Directors of the Company is authorised to increase the share capital of the Company by up to ISK 40.000.000 nominal value through the sale of new shares to employees of the Company or parties related to the Company. The offering price of the shares and terms of the sale shall be subject to separate contracts concluded by the Board of Directors of the Company with the employees or related parties involved. Shareholders shall not have pre-emptive subscription rights to the new shares, pursuant to Article 34 of Act no. 2/1995 on Public Limited Companies. The Board of Directors may, however, authorise shareholders in each instance to subscribe to the new shares, in part or in whole. There will be no restrictions on trading in the new shares. They shall grant rights in the Company from the date of registration of the increase in share capital to which they pertain. The Board of Directors shall decide the stages of exercise of the authorisation. The authorisation shall be effective until 28th of October 2009, to the extent that it has not been exercised before that date. The new shares shall belong to the same class and carry the same rights as other shares in the Company.”

For further information please contact:

Agust Gudmundsson Chairman
Tel: +44 7900 901 384

Lydur Gudmundsson CEO
Tel: +44 7900 901 385