Baugur in administration

Nationalised Icelandic bank Landsbanki confirmed today that its petition to force BG Holding into administration was granted by the High Court in London today.

Tony Lomas and Zelf Hussain of PricewaterhouseCoopers are now joint administrators of the Baugur subsidiary.

It follows the news this morning that Baugur had conceded defeat and withdrawn BG Holding from a moratorium process in Iceland, the equivalent of filing for Chapter 11 bankruptcy protection from creditors.

In a statement Landsbanki said that the retailers remain "unaffected by the placing of BG Holding into administration and continue under the control of their respective management teams".

Landsbanki's Resolution Committee said: "We believe that the appointment of administrators over BG Holding is the best way of ensuring stability and continuity for the UK companies in which it has shareholdings.

"Our role is to maximise the long-term value of those assets and we will give our full support to the management teams of the operating companies concerned. As the bank's interest is primarily in the UK assets of BG Holding, we do not intend to oppose Baugur Group's request for a moratorium on its remaining businesses in Iceland."

Baugur said earlier today that its decision to withdraw the moratorium process had been taken "to minimise any further jeopardy to the ongoing operations of Baugur's portfolio companies". 

Baugur Group chief executive Gunnar Sigurdsson said: "Following the collapse of the Icelandic banks, it has been our priority to protect the portfolio companies and ensure minimal disruption to the businesses, their employees and other stakeholders. 

"We are very disappointed with Landsbanki's decision as we believe that we had sound restructuring proposals to maximise the recovery and value for all stakeholders of the group. 

"In the interests of the portfolio companies we have decided to not oppose the administration of BG Holding and will work with Landsbanki's resolution committee and provide all possible support to the businesses. The portfolio contains strong brands and excellent management teams, which are well positioned to build on their strengths over the coming years."