Baugur will not be able to offload its shares in House of Fraser to raise cash to save itself without approval from Icelandic bank Landsbanki.
Lansbanki said it had exercised its rights over selected securities that Baugur subsidiary, BG Holding, has. It said it had nominated receivers PricewaterhouseCoopers to hold the shares on its behalf.
Landsbanki said it had applied a “fixed charge” to selected BG Holding shareholdings including its 34.9% stake in House of Fraser and its 63.7% stake in Hamleys. A “fixed charge” means that the debtor, in this case BG Holding, cannot sell the assets with the consent of the secured creditor, in this case Landsbanki.
Yesterday Baugur filed for the moratorium process, a kind of Chapter 11-style bankruptcy protection, in the Icelandic courts, after Landsbanki pulled out of restructuring talks. It was thought that Baugur might hold a fire sale of some of its assets to help raise cash to salvage itself.
This morning Baugur founder Jon Asgeir Johannesson slammed Landsbanki for petitioning to put the investment firm into administration.