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.