It now seems extremely likely that New Kaupthing will take a 40 percent share in Hagar, the company behind Iceland’s biggest supermarkets and fashion retailers, and that Jon Asgeir Johannesson and other investors will be allowed to keep 60 percent by investing ISK 7 billion. The action will free Hagar’s current mother company from debt and remove it entirely from the picture. Foreign creditors will most likely bear the brunt of the ensuing multi-billion krona losses.
Hagar, which runs shops including Bonus, Hagkaup and 10-11, is one of the companies owned by the holdings company 1998. 1998 is owned by Jon Asgeir Johannesson and family. In 2006, the company took a roughly EUR 260 million loan from Kaupthing to buy Hagar from Baugur. At today’s exchange rate, the euro debt is around ISK 48 billion, Visir.is reports. The debt of 1998 was transferred over to New Kaupthing after the banking crisis because it is an Icelandic company with mainly domestic operations.
A management reorganisation is taking place at Hagar, including the parachuting in of two Kaupthing employees to 1998’s board.
Due to massive debts owed to the bank, it now looks likely that New Kaupthing will take a 40 percent stake in Hagar and a contract is apparently being written up that would confirm the change of ownership, as well as totally removing 1998 from the picture.
New Kaupthing is, for the time being, still a nationalised bank.
I still don’t understand why any debt is forgiven. Why not just take possession of 100% of the company?
With all the current talk of private profits, public losses and of the architects of the kreppa not being punished, this should be a big issue.
“Foreign creditors will most likely bear the brunt of the ensuing multi-billion krona losses.”
What else is news? Once again, Iceland’s banks engage in a shady deal that favors a wealthy icelander, while investors abroad are defrauded. Folks, you may think this is a great idea, that it’s better to keep this business in the hands of a countryman, even if he’s somewhat of a crook, but in reality, this is just another signal to investors: Stay away from Iceland, the Vikings can’t be trusted! And this will hurt your economy tremendously in the next decades. Well, those who won’t listen wil have to learn it the hard way.
The dirty games full steam ahead.
I was reminded of the phrase “skítt-með-útlendingana” when I read this :) . Translated by Bjarni over here:
http://www.icenews.is/index.php/2009/09/24/david-oddsson-becomes-newspaper-editor/#comment-94576
Seriously, I have no problem with dumping on foreigners. It’s a valid strategy, although not one withput risk as Gray notes.
Just do it to benefit the banks (and hence the taxpayer) or the government (and hence the taxpayer) and not the same bu**ers who got you into the mess.
Less transparent than mud-coloured treacle covered in coal dust. Dodgy, dodgy, dodgy. I wonder if it is illegal under EU/EEA law for the foreign creditors to be treated like that. Wait for the legals complaints to be filed to find out…
“Jon Asgeir Johannesson and other investors will be allowed to keep 60 percent by investing ISK 7 billion”
Another bullet loan? Or is this one of the previous bullet loans?
A related article on Dadi’s EDA site:
http://www.economicdisasterarea.com/index.php/features/a-message-from-steingrimur-you-will-pay-for-jon-asgeir/
can anyone tell me what is teh way out you all see for your country. I mean, what’s the way ahead? small economy, irrelevant international weight, discredited businessmen, far far away.
I truly believe there must be something to do.
where can I have information about national (icelandic) industry?
Ok, hope someone could answer.
Best
Mike the swiss