Iceland’s Baugur has sought protection from its creditors, after talks with Icelandic bank Landsbanki collapsed over the investment vehicle’s GBP1bn (US$1.45bn) debt mountain.
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The company, which has interests in a number of UK retailers, revealed today (4 February)that it has applied to enter the moratorium process in Reykjavik.
The company said it had taken the action “in order to protect the group’s assets as well as the interests of all creditors”.
“The board of the company unanimously resolved to take this action following yesterday’s decision by Landsbanki to discontinue discussions regarding a potential restructuring of the group,” it said.
Baugur, whose investments are exposed to a weakening UK high street, hit the rocks after its credit lines dried-up following the nationalisation of Iceland’s major banks last October.
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By GlobalDataThe news has led to speculation that we could see a fire sale of Baugur’s investments.
The group holds a 14% stake in supermarket group Iceland, alongside various non-food investments including House of Fraser and Hamleys.
The company was unavailable for immediate comment.
