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FL GROUP Hf Prospectus December 2005 Prospectus December 2005

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FL GROUP Hf Prospectus December 2005 Prospectus December 2005 Prospectus December 2005 FL GROUP hf Prospectus December 2005 Prospectus December 2005 FL GROUP hf Prospectus December 2005 Table of contents I STATEMENTS AND NOTICE 3 Statements 3 References and glossary of terms and abbreviations 4 Publication calendar of accounts 5 Notice to investors 5 II OFFERING AND LISTING OF SHARES 7 Issuer 7 Issuer’s operations 7 Managers of offering and listing on ICEX Main List 7 Total share capital 7 Issue, listing and share characteristics 7 Share capital increase – authorisation, sale and listing 7 Cost and cash flow 8 Information 8 III SHARE CAPITAL AND OWNERSHIP 9 Total share capital and own shares 9 Authorisation for further increase of share capital 9 Development of share capital 10 Share performance 10 Market making 10 Ownership 10 Issue and share rights 12 IV ORGANISATION 14 Historical 14 Key milestones 14 Legal structure 14 Subsidiaries and associates 15 Organisational structure 15 V PRIVATE EQUITY 21 Investment strategy 21 General description 21 Current investments 21 VI ASSET MANAGEMENT 30 Investment strategy 30 Current portfolio 30 VII AIRCRAFT TRADING AND LEASING 31 Aircraft trading 31 Aircraft leasing 31 Aircraft pricing 31 FL Group's tactics and strategy 32 The fleet 32 VIII RISK FACTORS 33 Risks related to investment in the Company’s shares 33 Risks related to the Company 33 Risks related to operating companies 34 IX FINANCIAL HIGHLIGHTS 38 Consolidated Income Statement 38 Consolidated Balance Sheet 41 Consolidated Cash Flow Statement 42 The implementation of IFRS 44 APPENDICES A Articles of association of FL GROUP hf. 47 B Interim Consolidated Financial Statement January 1 - September 30, 2005 53 C Annual Accounts for 2004 71 1 2 I. Statements and notice Statements Issuer’s statement The Board of Directors of FL GROUP hf., Icelandic ID-No. 601273-0129, Sudurlandsbraut 12, IS-108 Reykjavík, Iceland, hereby declares that, to the best of its knowledge, the information in this Prospectus both accords fully with the facts and no important items have been omitted which could affect the evaluation of the Issuer or its shares. Reykjavík, 29 December 2005 On behalf of the Board of Directors of FL GROUP hf. Skarphédinn Berg Steinarsson Hannes Thór Smárason Chairman of the Board of Directors President & CEO Icelandic ID-No. 050763-7819 Icelandic ID-No. 251167-3389 Managers' statement Kaupthing Bank hf. - Investment Banking, Icelandic ID-No. 560882-0419, Borgartún 19, IS-105 Reykjavík, Iceland and Landsbanki Íslands hf. - Corporate Finance, ID-No. 540291-2259, Austurstræti 11, IS-101 Reykjavík, Iceland, hereby declare that in preparing this Prospectus they have gathered the data which in their estimation was necessary to provide a true and fair picture of FL GROUP hf. and its shares. To the best of our knowledge no important items have been omitted which could affect the evaluation of the Issuer or the shares for which listing is sought. Reykjavík, 29 December 2005 On behalf of Kaupthing Bank hf. - Investment Banking On behalf of Landsbanki Íslands hf. - Corporate Finance Örvar Kærnested Bjarni Thórdur Bjarnason Managing Director of Investment Banking Head of Corporate Finance Icelandic ID-No. 130776-4429 Icelandic ID-No. 110469-5869 Auditors’ statements KPMG Endurskodun hf., Icelandic ID-No. 590975-0449, Borgartún 27, IS-105 Reykjavík, Iceland, has audited and signed without qualification the Consolidated Annual Accounts of FL GROUP hf. for the years 2002-2004. KPMG Endurskodun hf. has compiled the Consolidated Interim Financial Statement of FL GROUP hf. for the first nine months of 2004 and 2005. We confirm that the information in this Prospectus is consistent with the accounts that we have audited or compiled. Reykjavík, 29 December 2005 On behalf of KPMG Endurskodun hf. Sæmundur Valdimarsson Jón Sigurdur Helgason State authorised public accountant State authorised public accountant Icelandic ID-No. 070263-4409 Icelandic ID-No. 050269-3619 3 References and glossary of terms and abbreviations strued as referring to Kaupthing Bank hf., Icelandic ID-No. 560882- References to the “Issuer” in this Prospectus shall be construed as 0419, unless otherwise clear from the context. References to "Lands- banki Íslands" shall be construed as referring to Landsbanki Íslands hf., referring to FL GROUP hf., Icelandic ID-No. 601273-0129, unless Icelandic ID-No. 540291-2259, unless otherwise clear from the con- otherwise clear from the context. References to “FL Group hf.”, “FL text. The share offering and the listing of the new shares on the ICEX Group”, “FL Group Consolidation”, "the Group" and “the Company” Main List is arranged jointly by Kaupthing Bank hf.'s Investment Bank- shall be construed as referring to FL GROUP hf., Icelandic ID-No. ing division and Landsbanki Íslands hf.'s Corporate Finance division. 601273-0129, and its subsidiaries and affiliates, unless otherwise clear from the context. FL GROUP hf. is the legal Icelandic name of the References to the "Icelandic Takeover Panel" or the "Takeover Panel" Issuer. or the "Panel" in this Prospectus shall be construed as referring to the Takeover Panel established in Iceland on 1 July 2005. The Panel issues References to "Sterling" in this Prospectus shall be construed as refer- statements, provides advice and encourages professional discussion ring to Sterling Airlines A/S, Danish ID-No. 18235404, Sterling Ice- on takeovers and related issues of companies listed on ICEX, but is landic ApS, Danish ID-No. 18647370 and Flyselskabet af 15. juli 2005 independent of ICEX. The founders of the Takeover Panel are ICEX, A/S, Danish ID-No. 28988362 and their subsidiaries and affiliates, Eignarhaldsfélag hlutafélaga (an association of listed companies), the unless otherwise clear from the context. Financial Supervisory Authority, Eignarhaldsfélag lífeyrissjóda um verd- bréfathing ehf. (association of pension funds), the Bankers’ and Secu- References to "Bluebird" in this Prospectus shall be construed as rities Dealers’ Association of Iceland, the Association of Small referring to Bláfugl hf., Icelandic ID-No. 460899-2229 and Flugflutn- Investors, the Central Bank of Iceland, the Icelandic Chamber of ingar ehf., Icelandic ID-No. 600372-0179 and their subsidiaries and Commerce and the Ministry of Commerce. The Agreement creating affiliates, unless otherwise clear from the context. the Panel is valid for three years. A decision on its continuation will References to "FL Travel Group" in this Prospectus shall be construed be taken in light of the experience gained of its work as referring to Flugfélag Íslands hf., ID-No: 530575-0209, Ferdaskrif- stofa Íslands hf., ID-No: 590670-0149, Íslandsferdir ehf., ID-No: 410791-1379, Kynnisferdir ehf., ID-No: 620372-0489, Bílaleiga Flug- leida ehf., ID-No: 471299-2439 and Flugleidahótel hf. ID-No: Abbreviations used in this Prospectus are listed in the fol- 621297-6949 and their subsidiaries and affiliates, unless otherwise lowing table. clear from the context. References to "Icelandair Group" in this Prospectus shall be con- CAA Civil Aviation Authority strued as referring to Icelandair ehf., ID-No: 461202-3490, Flugleidir- Frakt ehf., ID-No: 471299-2359, Loftleidir - Icelandic ehf., ID-No: The Companies Act number 2 from 1995 on 571201-4960, Flugthjónustan Keflavíkurflugvelli ehf., ID-No: 551200- actor Act 2/1995 Public Limited Companies 3530 and Tæknithjónustan Keflavíkurflugvelli ehf., ID-No: 511202- DKK Danish krone 2990 and their subsidiaries and affiliates, unless otherwise clear from EBITDA Earnings before interest, tax, depreciation the context. and amortization References to "the share offering" in this Prospectus shall be con- EBITDAR Earnings before interest, tax, depreciation, strued as referring to the offering of new shares in FL Group hf. mortization and rental expense which investors subscribed for on 10 November 2005 and which this PDP Pre-Delivery Payment Prospectus covers, unless otherwise clear from the context. The share offering is described in Chapter II of this Prospectus. GAAP Generally Accepted Accounting Principles ICEX Iceland Stock Exchange References to “ICEX” in this Prospectus shall be construed as refer- ring to the Iceland Stock Exchange, i.e. to Kauphöll Íslands hf., Ice- IFRS International Financial Reporting Standards. landic ID-No. 681298-2829, unless otherwise clear from the context. IRR Internal Rate of Return References to the “listing” and the "listing on ICEX Main List" in this ISD Icelandic Securities Depository Prospectus shall be construed as referring to listing of shares on the Main List at the Iceland Stock Exchange, unless otherwise clear from ISK Icelandic króna the context. JFK John F. Kennedy International Airport References to “ISD” in this Prospectus shall be construed as referring KEF Keflavík International Airport to the Icelandic Securities Depository, i.e. to Verdbréfaskráning LF Load Factor Íslands hf., Icelandic ID-No. 500797-3209, unless otherwise clear LHR London Heathrow Airport from the context. LIBOR London Inter Bank Offered Rate References to “the Managers” in this Prospectus shall be construed LTM Last Twelve Months as referring to Kaupthing Bank hf. – Investment Banking division, Ice- PAYE Pay-As-You-Earn landic ID-No. 560882-0419 and Landsbanki Íslands hf. – Corporate Finance division, Icelandic ID-No. 540291-2259, unless otherwise USD or $ US dollar clear from the context. References to "Kaupthing Bank" shall be con- 4 Publication calendar of accounts obtaining of all necessary clearances from the competition authorities FL Group hf. has announced
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