A former Icelandic stockbroker has claimed Baugur hit trouble as far back as March 2008.

Baugur’s financial woes were known about almost a year before it finally collapsed, a new book claims.

According to The Icelandic Miracle, published in Iceland last week by former Icelandic stockbroker Jón Fjornir Thoroddsen, Baugur - which spectacularly fell into administration in February this year - was struggling to meet bond obligations as long ago as March 2008.

Baugur strongly denies the allegations in the book, which claims that senior management at Kaupthing - the now nationalised Icelandic bank that provided financial backing to Baugur and its UK retail investments, as well as snapping up direct stakes in some - held a meeting with Kaupthing’s bond brokers on March 19, 2008.

The meeting was held to discuss Baugur’s financial situation after issuing bonds for billions of Icelandic krona.

In February this year, after the collapse of Kaupthing and fellow Icelandic banks Glitnir and Landsbanki in October, Baugur fell into administration, leaving the future of UK retailers including House of Fraser, Hamleys, Iceland, Aurum and the now defunct fashion group Mosaic hanging in the balance.

“So it was in March 2008 that 30 to 40 people in Iceland learned that Baugur, the biggest debtor of all the Icelandic banks, was having financial problems,” writes Thoroddsen

In an interview last week with Icelandic newspaper Morgunbladid, Baugur chief financial officer Stefan Hilmarsson said that Baugur’s cash position was strong at the time of the 2008 meeting. He said that there was equity of ISK58.3bn (£277.34m) and cash in hand of ISK10.3bn (£49m) at that time.

House of Fraser denies sale talk

Former Baugur-backed retailer House of Fraser has denied that any part of the business is up for sale or that it was close to breaching creditor obligations.

The retailer denied speculation that a charge against it dated January 5 at Companies House by its store-card credit provider - formerly GE Capital Global Consumer Finance, now Santander Cards - implied a lack of confidence in its ability to meet obligations.

The retailer fully repaid a £46m loan to GE Capital on January 1.

Separately, the retailer issued a statement in the wake of speculation that Debenhams was interested in bidding for it. Sales were “ahead of plan” and growth positive over the past 12 weeks, it said. As of June 15, it had cash in the bank in excess of £85m and working capital facilities of £36m.

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