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.

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