DEESIDE-BASED Iceland Frozen Foods has said yesterday there will be “zero impact” on its operations after a shareholder went into administration.
Icelandic retail investor Baugur, which owns 13.5% of Iceland, entered the “moratorium” process in Iceland after talks failed with Icelandic bank Landsbanki over restructuring its £1bn debt burden.
Landsbanki also filed a petition to place BG Holding – which owns its UK assets – into administration under PricewaterhouseCoopers.
Baugur’s difficulties are likely to trigger a fire sale of its UK retail assets, which also include House of Fraser and Hamleys, as it desperately tries to raise vital finance.
However, in a statement, the frozen food chain, bought back by a consortium led by its founder Malcolm Walker in 2005, brushed off concerns about the effects on its business.
It stated: “While Baugur has been very high profile in its connections with Iceland Foods, and were responsible for putting the original buy-out syndicate together, its shareholding in Iceland is only 13.5%.
“Iceland is not, and has never been, a subsidiary of Baugur.
“This latest development will have zero impact in the day-to-day trading of the company.
“The longer term shareholding of the business is not a concern, as management have a controlling interest.”
Baugur invests in companies which employ around 50,000 UK staff, but several firms in which it invests followed Iceland in distancing themselves from the problems. House of Fraser said Baugur was, with a 34% interest, a minority shareholder “with no impact on the strength of the business, or its day-to-day operations”.
The investment firm also owns 49% of Mosaic Fashions, which has interests in Coast, Karen Millen, Oasis, Principles, Warehouse and Shoe Studio.
Mosaic Fashions said Baugur’s move “will in no way affect the future strength of the group or the operations of the business”.
Private equity firms such as Alchemy are said to be interested in parts of Baugur’s empire assets, while Bhs and TopShop billionaire Sir Philip Green could also enter the fray.
Frozen food chain Iceland has been turned around since Mr Walker regained control in 2005, in a £150m deal, four years after his departure.
alex.turner
