Tycoon Sir Philip Green and private equity firms including TPG are vying to buy Baugur’s debt, opening the door to control chains such as Karen Millen and House of Fraser.
Originally, Green – understood to be the only interested party who can stump up cash fast – hoped to sign a deal within days of his arrival in Iceland last week.
However, he said that the scale and intricacies of Iceland’s difficulties were prolonging the process.
“The country has significant problems so until those issues are resolved and a process is in place, nothing can get done,” he said.
One source said it was uncertain who holds decision-making power in any potential deal. “The operating companies don’t know who is calling the shots. Neither do the banks or Icelandic authorities,” said the source.
The situation is complicated by significant sentiment in Iceland in favour of retention rather than sale of interests in Baugur’s successful businesses. Another source said: “It’s up to them to make a decision about what the debt’s worth – it depends on each asset’s value. They may decide some are worth keeping.”
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