XL survival hopes boosted by Icelandic financiers

The survival hopes of XL Leisure Group have been given a boost after a group of Icelandic investors said they will take on the loan of troubled tour operator should its guarantor, Icelandic shipping group Eimskip fail to meet its financing obligations.The group includes Björgólfur Gudmundsson, majority owner and chairman of Landsbanki Bank, and his son Björgólfur Thor, chairman of financial and investment companies Straumur-Burdarás and Novator.

The news follows Eimskip warning that it expects it will become responsible for meeting the EUR207m loan to XL. Its share price has plummeted almost 35 per cent in two days. Eimskip guaranteed the loan as part of its 2006 divestment of XL.

In a statement today Eimskip said: “Without making any assumptions in relation to the process, the board of Eimskip wishes to underline that - given the conditions in the European aviation market and information about the operation of XL - the likelihood that the loan guarantee will fall on Eimskip has increased.”

Eimskip chief executive, Gylfi Sigfusson, added: “We hope, of course, that the XL refinancing will be completed successfully.

“However, at the same time we also want to point out that - as with any such transaction - there is no certainty, and it may prove to be more difficult than expected.”