By  on February 9, 2009

LONDON — BG Holding ehf, a subsidiary of the troubled Icelandic retail investment firm Baugur Group, was put into administration in the U.K. on Friday by the Icelandic bank Landsbanki, one of Baugur’s creditors. BG Holding’s investments include a 34.9 percent stake in department store chain House of Fraser through Highland Group Holdings; a 37.7 percent stake in Aurum Group, the parent company of jewelers including Mappin & Webb; a 63.7 percent stake in the toy store Hamleys, and a 13.7 percent stake in Iceland Foods Group Ltd. The U.K. administration process is equivalent to Chapter 11 in the U.S., and the move follows Baugur Group’s application for creditor protection in Iceland last week. “We believe that the appointment of administrators over BG Holding ehf is the best way of ensuring stability and continuity for the U.K. companies in which it has shareholdings,” Landsbanki’s resolution committee said.A spokesman for Landsbanki said the bank has no plans to sell the shareholdings in the various businesses.“These are good businesses, and we want to make sure they continue operating and are not distracted,” he said. “Our role is to maximize the long-term value of those assets, and we will give our full support to the management teams and operation companies concerned,” the bank stated.Baugur said in a separate statement it had withdrawn its petition for a moratorium process on BG Holding at Reykjavík’s District Court, where the petition for creditor protection for the rest of the group is ongoing. Gunnar Sigurdsson, chief executive officer of Baugur Group, said while “very disappointed” with Landsbanki’s decision, the group would not oppose the U.K. administration process. “In the interests of the portfolio companies, we have decided to not oppose the administration of BG Holding and will work with Landsbanki’s resolution committee and provide all possible support to the businesses,” said Sigurdsson.

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