Icelandic investment group Baugur, owner of a large slice of the British high street, could fall into administration after its bank decided to call in £1bn of debt.

Jón Ásgeir Jóhannesson, chairman of Baugur, accused Landsbanki, the Icelandic bank, of delivering the retail conglomerate into the hands of 'British vultures'. He believes the assets will be sold off to interested bidders such as retail entrepreneur Sir Philip Green or a private equity firm such as Alchemy Partners.

Landsbanki said yesterday that it had asked PwC to step in and run Baugur, which owns stakes in UK retailers such as department store chain House of Fraser, Hamleys toy shop and Saks, the US department store. But Baugur has tried to stymie the process by filing for protection from its creditors in Reykjavik.

People who have seen Baugur’s books say there is little or no equity in the business as its balance sheet is weighed down by the pile of debt. That means that whether the Reykjavik moratorium or London administration takes precedence, Landsbanki is likely to take control of the company at some stage.

Financial Times, The Times Daily Telegraph