The rise of the Baugur empire may only be matched in scale by its collapse

The mind-boggling expansion of Baugur prompted disparaging rumours that it was backed by Russian funny money. Little did anyone realise that the funding was generated through excessive borrowings with the Icelandic banks, who would eventually drive the collapse of the country’s financial system. “These were deals done in the sauna,” said one Baugur adviser.

The beginning of the end for Baugur came when Gunnar Sigurdsson, the chief executive of the group, was forced to interrupt his dinner on Tuesday night at the iconic Mayfair casino, Fifty, with fellow entrepreneur Sir Tom Hunter, to take a phone call.

Restructuring talks with Landsbanki, Baugur’s main creditor, had collapsed, he was told, and the Icelandic bank was to petition the High Court in London to place Baugur’s UK subsidiary, BG Holding, into administration. BG Holding holds a 13pc stake in Iceland, 35pc in House of Fraser, 64pc in Hamleys and 38pc in jewellery group Aurum.

From The Telegraph

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