From Todays telegraph,
The Icelandic owner of West Ham football club and his billionaire son are the major financial victims of the collapse of XL Leisure Group, nursing most of a £165m bad debt.
West Ham United has axed its £7.5m deal with XL
Banking magnate Bjorgolfur Gudmundsson and his son Bjorgolfur Thor Bjorgolfsson, along with other investors, have personally taken on the debt owed by XL to prevent the failed travel group triggering wider collapses in the Icelandic economy.
Their fear was that XL could also bring down Iceland's biggest transport company Eimskip, in which they have a controlling stake.
XL's three main creditors were revealed yesterday as British bank Barclays, owed around £10m, Icelandic bank Straumur, owed £36m, and Icelandic bank Landsbanki, owed £165m. Total debts are estimated to top £350m.
West Ham yesterday axed its £7.5m three-year shirt sponsorship deal with XL, though a spokesman for the club insisted: "There is no other fall-out from the collapse of XL."
Comment: XL Leisure Group is an extra large disaster
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As XL's tearful chief executive Phil Wyatt said "ultimately I blame myself" for XL's administration, creditors rowed over who ended the refinancing talks that prompted its demise.
advertisementIn a last-ditch attempt this week, XL approached rival Thomas Cook over a potential rescue deal but the fledgling talks started too late. Administrator Kroll said it would be "grossly unjust" to place any blame on a single creditor, adding it would take months to work through XL's complex affairs.
One insider said: "It's the Icelandic backers that stand to lose the most from all this." XL's tangled web of debts to Icelandic companies leads back two years, when the tour operator's board staged a $480m (£267m) management buy-out from Eimskip.
The loan to complete the deal was provided to XL by bank Landsbanki, of which £165m was guaranteed by Eimskip.
Bjorgolfur Gudmundsson, who chairs Landsbanki, is the controlling shareholder in the bank while his son chairs Straumur. Straumur pumped £11m into XL in recent months in a doomed attempt to save the travel operator but settled for buying its French and German operations at "a considerable discount".
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Phil Wyatt said he had worked "night and day" before admitting defeat. "We have made every effort to refinance the principal debt of the group but, despite significant interest, the group was unsuccessful."
He said XL would have needed an extra £70m to survive the winter. A Civil Aviation Authority spokesman said it was likely 1,700 jobs would be lost. XL's latest accounts for the year to October 31 2007 showed pre-tax losses of £7.1m on revenues of £549m.