The retail holdings of Icelandic investment firm Baugur are "likely to be seized" by its principal lender, Landsbanki, a spokesperson for the group told just-food this morning (6 February).

The boards of Baugur Group and BG Holdings, its UK unit, have decided to withdraw a petition for a moratorium, which would have protected Baugur's assets from its creditors.

Baugur, whose investments are exposed to a weakening UK high street, hit the rocks after its credit lines dried up following the nationalisation of Iceland's major banks last October. The company owes around GBP1bn (US$1.45bn) to Icelandic bank Landsbanki.

The company, which has interests in a number of UK retailers, revealed that it had applied to enter a moratorium process in Reykjavik earlier this week.

In a statement, the company said it had withdrawn its petition "to minimise any further jeopardy to the ongoing operations of Baugur´s portfolio companies". 

"In the interests of the portfolio companies, we have decided to not oppose the administration of BG Holding and will work with Landsbanki´s resolution committee and provide all possible support to the businesses," Gunnar Sigurdsson, CEO of Baugur, said. 

"Our assets have not yet been seized but the banks have called in their loans. They are likely to become the owners after the whole legal process, but it isn't a done deal," a spokesperson for Baugur told just-food.

The company holds a 14% stake in UK frozen food retailer Iceland.