Bakkavör Brothers again Largest Shareholders in Company Skip to content

Bakkavör Brothers again Largest Shareholders in Company

Founders of the food processing company Bakkavör, the brothers Ágúst and Lýður Guðmundsson, have acquired around 40 percent of shares in the company this year and have again become its largest shareholders, two years after composition.

money-banknotes_psArchive photo by Páll Stefánsson.

They bought the shares from their former claimants who had changed the debts of Bakkavör Group to new shares, Fréttablaðið reports.

These include the Pension Fund for State Employees (LSR), Glitnir’s bankruptcy estate, fund managing companies owned by Íslandsbanki, MP Bank and smaller pension funds.

Before the banking collapse in 2008, a Dutch company in the brothers’ ownership, Bakkabræður Holding B.V., was the majority owner of the investment company Exista, which held their shares in Bakkavör and Kaupþing, among other companies.

In the report of the Icelandic parliament’s Special Investigative Commission, published in 2010, it was stated that Bakkabræður was among the companies that accepted the highest dividends in the pre-collapse boom years.

In 2005-2007, the company accepted almost ISK 9 billion (USD 71 million, EUR 55 million) in dividends.

Bakkavör Group made a composition in 2010 which was to enable the brothers to maintain ownership in the company, provided they manage to repay their debts with high interests.

Early this year it became evident that this wouldn’t be possible. Therefore it was decided to change claims to new shares and authorize the brothers to buy 25 percent. Since then they have quickly exceeded the limit.

According to Fréttablaðið, companies owned by Ágúst and Lýður Guðmundsson have entered the country with ISK billions through an investment line of the Central Bank and could that way obtain ISK hundreds of millions in discount on the shares in Bakkavör.

Another group of claimants holds the right to more than 50 percent of shares in Bakkavör and refuse to sell them to the brothers.

These are Arion Bank (34 percent), the Pension Fund of Commerce (7 percent) and Gildi Pension Fund (5 percent), in addition to smaller funds.

Other owners in Bakkavör include the hedge fund Burlington Loan Management Ltd., which has come to acquire 5 percent in the company by buying up shares and claims.

The hedge fund is also among the largest owners of Klakki, formerly Exista, and the largest claimants in Kaupþing and Glitnir.

Managing director of LSR Haukur Hafsteinsson told said he didn’t realize that the brothers were behind the purchase of the shares the pension fund held in Bakkavör.

Haukur added that LSR had been against permitting the brothers to reclaim 25 percent in Bakkavör with new stock worth ISK 4 billion.

Click here to read more about Bakkvör.


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