Brothers Can Buy Back Share in Bakkavör Skip to content

Brothers Can Buy Back Share in Bakkavör

Icelandic businessmen brothers Ágúst and Lýður Guðmundsson will be able to buy up to 25 percent of shares in Bakkavör Group, the company which they founded but were about to lose to claimants, after they agreed to give up their current shares in the company.

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Archive photo by Páll Stefánsson.

According to Fréttablaðið’s sources, if the agreement will be confirmed at a shareholders’ meeting later this month, the claimants of Bakkavör Group, mostly Icelandic banks and pension funds, will acquire 75 percent of shares in the company, which is valued at ISK 15-30 billion (USD 120 million, EUR 92 million).

As stated in the composition agreement Bakkavör Group made with its claimants two years ago, the company was to have the opportunity to repay its debts with interests until mid-2014. If that worked out the brothers were to obtain a 25 percent stake in the company.

The claimants agreed that the brothers would direct Bakkavör Group up until that point and have the majority of board members.

However, the company’s operations did not go as planned and it became clear some time ago that the terms of the composition agreement could not be fulfilled. Therefore changing claims into shares was supposed to be expedited.

The majority of the board, dominated by the brothers, had to agree to these plans. Fréttablaðið’s sources now state that after the change has been made, an increase in share capitalization will take place, in which the brothers will be able to invest.

This could result in them reclaiming up to 25 percent of shares in the company. Part of the agreement involves that they hand over Klakki, earlier known as Exista, a share in Bakkavör which they moved out of the company in 2009. It will be thinned down to four percent.

Click here to read more about Bakkavör.

ESA

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