Page last updated at 20:24 GMT, Thursday, 5 February 2009

Bank turns the screws on Baugur

Hamleys' window
Baugur owns stakes in Hamleys, Mosaic and French Connection

The main creditor of Icelandic retail investor Baugur has moved to prevent the company selling any of its investments on the UK High Street.

The action by Icelandic bank Landsbanki comes a day after it applied for Baugur's UK business, BG Holding, to be put into administration.

Baugur has applied for protection from Landsbanki and other creditors.

The firm, which owns stakes in UK shops such as House of Fraser and Hamleys, is said to have debts of about 1bn.

'Faith in firms'

Baugur's dispute with Landsbanki comes after the two failed to reach agreement over Baugur's plans to restructure the business.

There are now press reports that Baugur's UK unit could be placed in administration as early as Friday.

Landsbanki's move to prevent Baugur from selling any of its UK interests does not affect the day-to-day operations of any of the companies in question.

BG Holding owns 63.7% of toy store Hamleys, 37.8% of jewellery group Aurum, 34.9% of House of Fraser, and 13.7% of frozen food chain Iceland.

Landsbanki said it "reiterates its faith in the strong management teams of Iceland Foods, House of Fraser, Aurum and Hamleys."

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