Based on the conclusion of the District Court in a case against Valitor, the combined impact of irregular items on Arion Bank's Q1 2019 financial results will be negative by ISK 1.2 billion
Reykjavík District Court issued today a decision on the case Datacell ehf. and Sunshine Press Productions ehf. vs. Valitor hf, a subsidiary of Arion Bank hf. Valitor was ordered to pay the plaintiffs a total of ISK 1.2 billion in damages. Valitor is classed as a disposal group held for sale in the consolidated financial statements of Arion Bank. The Court's decision will negatively impact the Bank's consolidated financial results for Q1 2019 by ISK 600 million after tax considerations. The combined impact of the Court's ruling, the bankruptcy of WOW Air and the sale of Arion Bank's shares in Farice on the Bank's consolidated financial results for Q1 2019 is negative by ISK 1.2 billion.
The Court's conclusion will not affect the Bank's ongoing sales process of Valitor. Valitor's board of directors will decide if the District Court's conclusion will be appealed to the Court of Second Instance.
The impact of the Court's ruling is estimated to be less than it would otherwise have been on account of an agreement which was made when Arion Bank acquired Landsbankinn's interest in Valitor Holding hf. in 2014. Under this agreement the seller agreed to pay a share of any damages that Valitor might be required to pay in respect to this case.
Arion Bank has disclosed information on the case in its annual financial statements and the prospectus published prior to the Bank's IPO in 2018.
These are irregular items which have no impact on the regular income and general operating expenses of Arion Bank. The Bank's financial targets for the next 3-5 years remain unchanged.
Arion Bank will publish its Q1 2019 financial results on 8 May 2019.
Sture Stölen, head of investor relations, email@example.com.
Theódór Fridbertsson, investor relations, firstname.lastname@example.org, tel. +354 856 6760.
This information is information that Arion Bank hf. is obliged to disclose pursuant to the EU Market Abuse Regulation.
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