Iceland Foods purchase contract written up

The resolution committees of Old Landsbanki and Glitnir have agreed a sale contract for the British supermarket chain Iceland Foods. The company’s founder and chairman now looks set to take over as sole owner and part of the sale price will be loaned from the old Icelandic banks.

The sale price is around ISK 300 billion (EUR 1.8 billion). If the sale goes through as planned Landsbanki’s asset portfolio will increase by ISK 94 billion since its last estimate.

Old Landsbanki owns 67 percent of Iceland Foods and Glitnir owns 10 percent. Negotiations have been ongoing about the sale of both shares and the finalists were two investment funds and a group led by Iceland Foods founder and chairman Malcolm Walker. Walker’s group now appears to have won the battle, RÚV reports. Walker and his associates already own 23 percent in Iceland Foods.

The sale price is GBP 1.55 billion and the resolution committees will loan Walker GBP 250 million of that amount, or 16 percent, according to the Daily Telegraph.

The deal is at an advanced stage, but it could still fall through until ink meets paper. Walker says he hopes the final signatures can be made in the next two or three weeks.

When the Old Landsbanki resolution committee last estimated its assets last autumn, its stake in Iceland Foods was estimated at GBP 1 billion; 500 million less than the final sale price. According to that estimate the bank would be able to cover all priority claims on its estate, and more. The bank therefore still believes it will be able to cover the Icesave debt in full.