Company Announcement

Bakkavör Group's Board of Directors resolves to

Reykjavik, 17 May 2006. The board of directors of Bakkavör Group has resolved to increase share capital in the company by 437,046,648 shares pursuant to article 3 of the company's articles of association in order to fulfil the company's obligations pursuant to convertible bonds owned by Kaupthing Bank hf. Shareholders do not have priority rights to the new share capital according to article 3 of the company's articles of association. The total number of shares in Bakkavör Group hf. after the increase is 2,133,909,016.
For further information, please contact:
Hildur Árnadóttir
CFO
Bakkavör Group
Tel: +354 550-9700


About Bakkavör Group

Bakkavör Group is a leading international food manufacturing company specialising in fresh prepared foods and produce. The Group operates 43 factories and employs over 16,000 people in seven countries with a pro-forma turnover over £1 billion sterling. The Group's Head Office is in Reykjavík, Iceland, and the business is listed on the Iceland Stock Exchange (www.icex.is Ticker: BAKK). In addition to the UK and Iceland, the Group also has business operations in France, Belgium, South Africa and China.

Bakkavör Group was founded in 1986 and celebrates its 20th Anniversary this year. During this time, the business has grown significantly and today Bakkavör Group the largest manufacturer of fresh prepared foods and produce in the UK.

The Group's vision is to be recognised and respected as the world's leading fresh prepared foods and produce provider. Bakkavör Group has attained leading market positions in its key market areas of ready meals, pizzas, convenience salads and leafy salads. In total, the Group makes over 4,700 products in 17 product categories, which are developed and sold under its customers' own brands.

For more information about Bakkavör Group, please visit the Group's website www.bakkavor.com

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