Baugur chairman Jón sgeir Jóhannesson has admitted he could lose control of his UK retail business as Sir Philip Green considers buying about £2 billion worth of debt from failed Icelandic banks.
In a television interview yesterday, Baugur’s founder and chairman Jón sgeir Jóhannesson said: “The person that owns the debt controls the company.” He admitted that, should Green take charge, even the fire sale prices achieved for some of Baugur’s companies would be the right thing for employees and others concerned.
Green flew into Iceland last week and has been locked in talks with the Icelandic government and Jóhannesson over a deal that would enable the billionaire owner of Arcadia to take control of Baugur’s debt at a discounted price.
“I had various meetings with government officials and committees,” Green confirmed. “They were all very constructive in terms of them understanding that we have the capability to do this at speed and to avoid any unnecessary fallout for these businesses in terms of them getting into financial difficulty.”
The deal would be beneficial to the Icelandic government and Green, who is thought to be keen to add to his fashion portfolio, which includes Topshop, Topman, Dorothy Perkins and Evans.
Baugur has continuously denied that the financial crisis in Iceland would affect the operational running of its UK portfolio. However, Jóhannesson was forced to concede that if Green took control of the group, it could force a restructuring.
Jóhannesson also said that a deal would be preferable to letting Baugur’s UK stores “fall one after the other”. He added that his priority was safeguarding the 55,000 employees working for Baugur-owned companies.
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