LONDON — As Sir Philip Green continues to negotiate with the Icelandic government to buy a chunk of Baugur Group’s debt, the Icelandic investment company issued a statement Tuesday insisting its businesses won’t file for bankruptcy.
On Tuesday, British press reports said the company, whose retail businesses in the U.K. include Whistles, Karen Millen and All Saints, was set to appoint the U.K. administrator BDO Stoy Hayward. Administration is the U.K. equivalent of Chapter 11. Alongside its investments in several U.K. specialty retailers, Baugur holds stakes in the department store chain House of Fraser and designer brands Matthew Williamson and PPQ, and an 8.6 percent stake in Saks
“Further to media speculation today, we would like to make clear that Baugur has not appointed any advisers,” said Gunnar Sigurdsson, chief executive officer of Baugur. “We continue to monitor the situation in Iceland [and] where possible maintain a dialogue with the banks and manage and plan our businesses accordingly. We have no plans to place our U.K. businesses into administration.”
The future of Baugur’s businesses has been subject to speculation since Iceland spiraled into a financial crisis over the past few weeks. Last week, Iceland’s largest bank, Kaupthing, was the third in the country to be nationalized. The bank owned stakes in two of Baugur’s companies, Mosaic Fashions and Jane Norman.
It is thought that, if a deal with Green, owner of Topshop’s parent company, Arcadia Group, does go ahead, it would be sealed this week. Green said over the weekend that Baugur has more than
$2 billion worth of debt with Icelandic banks, but declined to comment on how much of that debt he plans to purchase or at what price.
Meanwhile, the British press has been rife with rumors that private equity groups and venture capital companies including Permira, TPG and Alchemy might swoop in to buy stakes in Baugur. TPG, which has a $20 billion fund earmarked for global investments, would be a prime candidate. A spokesman for TPG declined to comment, but a source close to the company said Baugur’s brands would likely be on its radar.
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