Iceland’s biggest hardware and DIY retailer has been sold after a very rocky period following the economic crash.
Húsasmiðjan was heavily over-leveraged in the lead-up to the financial collapse and has several times been the subject of office searches related to claims of price fixing and accounting anomalies. The company has branches all over Iceland and was considered viable enough to be rescued by the Enterprise Investment Fund. The EIF is an umbrella investment company jointly owned by some of Iceland’s biggest pension funds. It was set up to help revitalise the national economy and save large companies from possible bankruptcy.
Now the EIF has sold all of Húsasmiðjan’s operations and assets to the Danish DIY retail chain Bygma Gruppen A/S. The sales process has dragged on since August and Bygma submitted the highest offer. The cost of the purchase is reported to be ISK 3.3 billion (EUR 20.6 million); meaning that Bygma takes on Húsasmiðjan’s ISK 2.5 billion (EUR 15.6 million) non-default debt burden and pays an additional ISK 800 million (EUR 5 million) on top.
Bygma will also take over the company’s other debts, its employment contracts with staff, its rental contracts and all other operation-linked obligations, according to a statement from the EIF.
None of Húsasmiðjan’s debts are being written off in the sale and the company’s name and branding will not change when Bygma takes over on 1st January.
According to Vísir.is Bygma is a private Danish company which sells and distributes timber and other building materials. Bygma runs over 65 shops in Denmark, Sweden and the Faroe Islands and has about 1,600 employees. Bygma sales in 2011 will be around EUR 630 million (ISK 100 billion). Bygma was established around 60 years ago and has always been owned by the same family.