Baugur ends in liquidation

THE UK arm of Icelandic retail investor Baugur has finally gone into voluntary liquidation, offering a glimmer of hope to its creditors and former employees.

PricewaterhouseCoopers, which has looked after the group’s affairs since it collapsed a year ago, said it had recovered funds which would be distributed to unsecured lenders.

PwC freed up £1.3m cash from a bank account and managed to cancel the lease on Baugur’s once-plush headquarters on New Bond Street.

The liquidation marks the final chapter in the long rise and dramatic fall of the Icelandic group.

Formed in 1998 through the merger of two supermarkets, Baugur embarked on a phase of breakneck expansion into the British high street when it bought the iconic toy shop Hamleys in 2003. In 2006 it took ownership of House of Fraser, the department store.

As the credit crisis hit in 2008, however, Baugur began to struggle under its £1bn debt. It crashed into bankruptcy protection in February last year after failing to agree a solution with lender Landsbanki.

In a report filed with Companies House at the end of January, PwC said: “The administrators anticipate surplus funds will be available for distribution to unsecured creditors.”

The amount given to each creditor will depend on the volume of claims.