Shamed Icelandic money men plot £1.5bn comeback

Trio plan to float supplier of pizzas and salads to M&S and Tesco

THREE tycoons who were embroiled in the Icelandic financial crisis are plotting a comeback by floating their food business on the London Stock Exchange.

Lydur and Agust Gudmundsson, dubbed the Bakka brothers, angered their countrymen over deals struck in the lead up to the 2008 financial crisis and were involved in the collapse of the Kaupthing Bank.

Lydur was handed an eight-month prison term for share-deals he made, while Agust settled a £6.7m legal claim with investors.

They are teaming up with Simon Burke, who was responsible for selling toy store Hamleys to Icelandic-owned investment company Baugur shortly before Baugur collapsed.

Together they will bring ready meal and fresh pizza maker Bakkavor to the City in a £1.5bn float to raise £100m to pay debt and fund expansion.

Bakkavor supplies food to most of the major supermarkets, including Tesco, Waitrose, Marks & Spencer and Sainsbury’s.

The firm was founded by the Gudmundssons in 1986.

They were among a handful of so- called ‘Viking oligarchs’ who blazed an international trail of debt-fuelled deal-making during Iceland’s boom, only to see much of their empire unravel when Iceland imploded in 2008.

Bakkavor began as a small cod roe manufacturing business, but grew through a series of heavily debt-backed acquisitions both at home and overseas.

In 2001 it snapped up Katsouris Fresh Foods in Birmingham, a major supplier of dips and snacks, despite it being five times its size. At the time the deal was the largest ever takeover by an Icelandic company and paved the way for the nation’s entrepreneurs looking to expand internationally. The Gudmundssons came unstuck when the 2008 financial crisis hit Iceland’s banks. The brothers held a 45pc stake in Exista, the largest shareholder in Kaupthing and were one of its biggest customers.

Lydur, who was chairman of Exista, was sentenced to eight months in prison by Iceland’s Supreme Court in 2014 but reportedly only spent three weeks doing community service.

Agust was sued over a £6.7m loan issued by Kaupthing as investors sought to claw money back from the bosses they blamed for the crisis. He settled the claim in 2010. The Gudmundssons lost several interests as a result, many of which were either seized by creditors or left bankrupt. But they managed to regain control of Bakkavor after teaming up with US hedge fund Baupost to buy back the firm last year.

Bakkavor, based in Lincolnshire, has 19,000 staff, and made a pre-tax profit of £63m in 2016. Now they are seeking to raise more money to expand.

The brothers have appointed Burke as chairman. He made £1.2m as chief executive and chairman of Hamleys when it was sold to Baugur for £47.4m in 2003. It went bust and fell into French and then Chinese hands.