Mar 11, 2009
Iceland retail investor Baugur headed for liquidation
Mar 11, 2009
REYKJAVIK, March 11, 2009 (AFP) - Icelandic retail investor Baugur, which has stakes in a number of British high street stores, is headed for liquidation after a court on Thursday March 5 rejected its request for financial restructuring.
Baugur - spring-summer 2009
"It is the conclusion of the court that the debtor's plan of action is not realistic and thus not likely to lead to the reorganisation of finances ... and therefore (Baugur's) request is denied," the Reykjavik court said.
Last month, the court had approved Baugur's request for bankruptcy protection, enabling it to temporarily suspend payments and protect the group's assets as well as the interests of all creditors.
Companies in which Baugur has investments employ 50,000 people worldwide, and include British toy store Hamleys, frozen food retailer Iceland, fashion label All Saints, department store Debenhams as well as clothing stores Oasis, Principles, Warehouse, French Connection and House of Fraser.
The company has been hit by the meltdown of Iceland's financial sector, which crumbled in October and pushed the government to nationalise the major banks as the currency nosedived.
A significant share of Baugur's debts are owned by companies now in financial difficulty.
One of the nationalised banks, Landsbanki, which owns most of Baugur's Icelandic debt and had been tasked with helping it restructure its finances, said in early February its efforts had failed.
In addition, in December the heads of Baugur were charged with tax evasion amounting to 2.4 million dollars (1.9 million euros) between 1998 and 2003.
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