Hagar Chair: No Debts Will be Written Off Skip to content

Hagar Chair: No Debts Will be Written Off

Jóhannes Jónsson, chairman of commercial enterprise Hagar and co-founder of grocery chain store Bónus, wrote in response to the news that New Kaupthing was going to write off a portion of Hagar’s debts in a letter to Morgunbladid today that no loans will be written off.

The headquarters of Kaupthing in Reykjavík. Copyright: Icelandic Photo Agency.

Jónsson confirmed that discussions are taking place with New Kaupthing on the affairs of the heavily-indebted Hagar, ruv.is reports. However, he stated that these discussions were taking a natural course and it is expected that foreign investors will bring the company new capital.

There is nothing unusual about the bank working with the company’s current owners because they know its affairs better than others, Jónsson wrote.

According to recent news, New Kaupthing could acquire 40 percent in Hagar, while Jónsson, his son Jón Ásgeir Jóhannesson and other family members will maintain a 60 percent stake in the company. It is rumored that ISK tens of billions will be written off in the process.

In his letter, Jónsson criticizes Morgunbladid’s editor, former Prime Minister and Central Bank Chair Davíd Oddsson, who has commented on this case in his editorials.

Jónsson described it as ironic that Oddsson is talking about writing off tens of billions for tycoons but fails to mention that Prime Minister Jóhanna Sigurdardóttir once stated in a speech that Oddsson himself had cost the nation at least ISK 300 billion (USD 2.4 billion, EUR 1.5 billion).

“But the Moggi blogger is naturally not interested in these numbers,” Jónsson wrote. “Mogginn” is a nickname for Morgunbladid.

According to a statement by New Kaupthing, no debts have been written off for 1998, Hagar’s mother company, and the company is not being given any special treatment within the bank, Fréttabladid reports.

The statement reads that news stories claiming that extensive write-offs in the case of Hagar and 1998 are groundless. “The bank does not write off debts or change them into shares unless all other recourses have been tried first or deemed unlikely to succeed. In the case of write-offs, laws and regulations are being complied with.”

PM Sigurdardóttir said after a cabinet meeting yesterday that it is not self-evident that the owners of companies where debts are being written off continue to participate in their operations as owners, Morgunbladid reports.

In case of larger companies, a tender offer should take place, Sigurdardóttir said when asked about Hagar’s and 1998’s debt potentially being written off.

The PM stated that the unitary work methods of the banks in regard to debt solutions for companies were largely good. “It is key that equality is maintained.”

She added that it is important to review the entire regulatory environment, cross-ownership, market abuse, etc. “Even more transparency will be secured, because that is very important in this entire process […] and that there is faith in companies being treated unitarily within the banking system.”

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