Lets call Siggi

The Exista brothers, Lydur and Agust Gudmundsson were amongst the first vikings in the boats when the Icelandic business raiders headed off to Europe.

Agust used to tell the story of how they made the impossible possible to crowds of employees of different companies that they were big owners in. They were presented as role-models for Icelanders who wanted to conquer the world from humble beginnings.

The story presented at these gatherings was fairytale-ish. They used to own a small business in a small town called Njardvik that concentrated on fish-eggs and caviar production. Within a few hectic years they were a “a leading international food manufacturing company specialising in fresh prepared foods and produce. The Group operates 66 factories and employs over 20,000 people in 10 countries, with a pro-forma turnover in 2007 of £1.5 billion. The head office is in Reykjavík, Iceland, and the Group is listed on Nasdaq OMX Nordic Exchange in Iceland”, according to their website. In addition they became the largest owners of investment vehicle Exista which was a big shareholder in Kaupthing, Siminn (former national telecom company) and VIS (insurance company). In short a massive company with no discernible concentration from very humble beginnings in a concentrated field.

They wanted to expand abroad so they went to look at a factory in Sweden. After the visit they realized that this purchase was too big for them and they drove disappointed down towards Kastrup airport in Copenhagen, Denmark. On the way they had a great idea, “let’s call Siggi”. They told the Kaupthing boss about the factory and Sigurdur Einarsson agreed to help them out. They drove straight up to Stockholm and got a meeting with the owners who at first laughed at them but agreed to sell when they were assured that Kaupthing would back the brothers.

Apparantly it is good to have Siggi’s number.

But now Exista and Bakkavor are in big trouble.

Apparently it is not good to mix your several businesses in several industries through complicated and delicate cross-ownership. When you expand your business with a loan from a bank, then buy other businesses with the bank, then buy big  in the bank itself and then buy amongst all those interconnected businesses, all with leveraged takeovers geared to the hilt then the smallest hitch can start the dominoes.

But through those businesses they should have gathered a lot of new phone numbers. And they are probably calling to see if their debts can be cancelled and they can keep on going.

Filthy rich or rich in a filthy way

If Iceland has an Imelda Marcos, a Ceaucescu or a Mugabe, a politician who profits obscenely through connections and power then that politician is Finnur Ingolfsson.

Finnur was the minister of industry before the turn of the century when he suddenly quit, citing unfair criticism that was dragging him down. He then became one of our incredibly qualified Central Bank Governors before disappearing. Then the banks were privatized early in the decade and all of a sudden Finnur was a billionaire.

Today, Morgubladid again strikes journalistic gold, yet again Bjarni Olafsson and Finnur’s profits from Icelandair are dragged into daylight. A company called Langflug bought 32% of Icelandair from FL Group in October 2006 at 27 per share, therefore paying 8,6 billion ISK. Finnur’s  company called FS7 then bought 25% in Langflug for 1 billion ISK in December 2006. If Finnur had bought 8% in Icelandair at 27 per share he would have had to pay 2,3 billion. In August 2007 Finnur on the other hand exchanged his shares in Langflug for shares in Icelandair and got those 8% which he promptly sold at 32 per share, or for 2,5 billion. Finnur was in this enviable position through his influence in a co-op fund that noone knew existed until last year, but had been used by Progressive Party honchos without the owners’ knowledge to become filthy rich.

More about the co-op fund later.

Re-Re-branding Glitnir

A couple of years ago Birna Einarsdottir lead the re-branding of Islandsbanki into Glitnir.

Now she is the new CEO of the new Glitnir she is stuck with a broken brand. Actually a disease-ridden brand.

So Glitnir has decided to re-rebrand itself, to Islandsbanki. Is this review-branding? Or rearview-branding?

It cost tens of millions to change things the first time around. Will they go back to the basement for the old signage and posters?

If only Islandsbanki could rebrand its CEO. She is now known as the woman who was supposed to get 200 millions ISK in Glitnir stock for free…or something else they cannot explain all that well.