FEBRUARY 4, 2009

Baugur goes into Chapter 11

Baugur, the heavily-indebted Icelandic company, that has been a major sponsor of the Williams team in recent years, has applied for court protection for its assets while it negotiates with creditors.

The company is reportedly weighed down with $2bn of debts.

It owns retailers around the world and employs more than 50,000 people.

It is likely that the company will now have to sell off parts of its business to pay off the banks.

The company is involved with toy retailer Hamleys, House of Fraser, All Saints, the supermarket chain Iceland, Goldsmiths, Mappin & Webb and many other retail companies.

The three main creditor bank of Baugor have been taken over by the Icelandic government.

The company doees not have any signage on the Williams this year so it is not clear if the bankruptcy will affect the team's money supply.

A couple of years ago Baugur was negotiating to buy Williams and then decided to be the backer of the Prodrive F1 project, although this failed because of uncertainty over the rules.