Former Icelandic business tycoon set to reach debt deal with bank

Karl Wernersson, the controversial Icelandic investor and former majority owner of the holding company Milestone, has completed a debt review with Islandsbanki and will in all likelihood be allowed to keep his Lyf og Heilsa chain of pharmacies — to the dismay of many.

DV reports that the debt plan with the bank looks set to include debt write offs for Lyf og Heilsa and/or its mother company, Aurlaka ehf. Lyf og Heilsa has a 30-35 percent share of the Icelandic pharmacy market.

DV sought out University of Iceland business studies lecturer Vilhjalmur Bjarnason for his reaction. He said he had only one thing to say: “I will not shop at Lyf og Heilsa. Other than that it doesn’t concern me.”

An un-named DV source told the paper that if the debt restructuring contract has not already been signed off on at Islandsbanki, then it soon will be.

Lyf og Heilsa owed around ISK 1.7 billion at year-end 2009 and Aurlaki ehf. owes Islandsbanki around ISK 3 billion. Another newspaper source claims that the contract is not completely ready, but that it is nearly ready and will be signed within a week or two at the latest. The Wernersson debt restructuring project has been worked on for a long time, the source says.

Islandsbanki had considered seizing Lyf og Heilsa from Wernersson in part payment for his debts; but it now appears that the former billionaire will be allowed to keep his pharmacies. The news was not welcomed by those angry at the former ‘Outvasion Viking’ businessmen who many blame for bringing Iceland to its knees, financially speaking. Karl Wernersson used to be the boss of the Sjova insurance company, Milestone and Askar Capital; as well as Lyf og Heilsa.