The first billionaire in Iceland: how to lose everything and go back to the Forbes list

The first billionaire in the history of Iceland Thor Borgolfsson earned his first money in Russia; in 2008, during the crisis, he lost everything, including his yacht and Ferrari, but made a deal with the creditors, and managed to return in the Forbes list.
16.03.2015
RBC
Origin source
Billion from Russia

Born in 1976 in Reykjavik Thor Borgolfsson - hereditary entrepreneur: his father and grandfather were well-known entrepreneurs in the country. When Thor graduated from a prestigious business college at home, his father's transport company Borgolfura Gudmundsson, scored loans in the struggle with its main local competitor, went bankrupt. Gudmundsson himself as telling Forbes magazine, he has been charged under several articles, from theft to fraud, but eventually received 12 months in prison for less serious charges relating to inconsistencies in the statements of the company.

After the story of father and son did everything to restore the family's reputation. In 1987, Thor moved to the US, where he studied marketing at the University of New York. In the early 1990s, his father, who already had experience in the brewing business, together with his son and friend Magnus Thorsteinsson founded in the Russian company producing alcoholic beverages and "Bravo International" beer (main brands - "Bochkarev" and "Hunting") by buying old equipment to sell at neprofilnye assets Icelandic pharmaceutical company Pharmaco, in which the father and son worked. All 1990 son actually run the business, held in St. Petersburg. In 2002, Thor Borgolfsson earned the first big money: beer business "Bravo International" has acquired the Dutch company Heineken for $ 400 million.

Returning to his home in the early 2000s Borgolfur and Thor together with your partner through Thorsteinsson investgruppy Samson acquired for $ 145 million (data Iceland Review) 45,8% stake in the second largest in the country commercial bank - Landsbanki (originally owned by the state and was privatized in 2002). By 2005, Thor Borgolfsson became the first Icelander in the world ranking of billionaires Forbes with a fortune of $ 1.4 billion. Two years later he was joined by his father, who headed the board of directors of the bank, has accumulated $ 1.2 billion, while at the same time bought the club of the English Premier League West Ham .

Even earlier, in 1999, Borgolfsson began buying shares of the largest Icelandic pharmaceutical company Actavis (he became its CEO in 2000). In 2007 he took a loan of $ 5.4 billion to Deutsche Bank, he brought his stake in the company to contceiling elements. Icelanders managed to persuade bankers to finance a risky deal - the ratio of debt / EBITDA of the company reached 12.5 (a year later, when the crisis began in Europe, the bank regretted the deal).

Simultaneously Borgolfsson bought packages of European telecommunications companies: investment company Novator he founded and headquartered in London, has acquired stakes in mobile operators and Internet service providers in Finland, Greece, the Czech Republic, Poland and Bulgaria.

Icelandic crisis

Causes

In autumn 2008, Iceland has suffered financial disaster of this magnitude, which did not know none of economically developed state in history. His reason was the collapse of the largest Icelandic banks Kaupthing, Landsbanki and Glitnir under the influence of bankruptcy of Lehman Brothers in the United States. Their total debt is estimated at $ 60 billion - an amount exceeding almost five times Iceland's GDP. The government nationalized the banks in late September - early October, but the wave of the crisis did not stop. Icelandic krona against the euro has fallen by 60% in October - November 2008. To stabilize natsiocial currency Central Bank of Iceland, with the approval of the IMF's October 28, 2008 temporarily increased the key interest rate from 12% to a record 18%. From Reykjavik IMF got stabilization loan of $ 2.1 billion, another $ 2.5 billion allocated Sweden, Norway, Denmark and Finland. In 2009, the Icelandic economy has entered into the deepest among the 33 developed countries in recession (decline by 6.9%), it lasted more than a year.

Effects

Mass discontent of the population has led to the resignation of the entire government in early 2009. Former Prime Minister of Iceland, Geir Haarde, brought to trial for having ignored the information about the threat of the collapse of banks. In addition, the prosecution accused the former minister that he did not control the situation surrounding Icesave, «Daughter," one of the country's leading banks - Landsbanki. Due to the bankruptcy of the financial group Landsbanki and Icesave in October 2008, their savings have lost more than 350 thousand. UK citizens and the Netherlands. However, in jail or a fine is not reached: he was found guilty only that he was not warned about the crisis-ministerial colleagues, and for that no punishment is not provided. But four former boss of the bankKaupthing received in 2013, prison sentences of three to five years. The former head of Landsbanki Sigur Arnason in 2014 was sentenced to 12 months' imprisonment.

The fall in the crisis

Viking's success crossed the crisis, which in Iceland has affected almost stronger than the rest of Europe. In the fall of 2008, all three of the largest bank in the country, including those of Landsbanki, were in critical condition. Iceland's banks were not able to refinance their debt in the amount of $ 85 billion (at the time, according to Bloomberg data, the GDP did not exceed $ 13.5 billion) and ended in October, on the verge of bankruptcy. The government was forced to nationalize financial institutions, and their ex-director received prison sentences. "On my 40th birthday in March 2007, I was on top of the world, and only 250 people were richer than I am. Carousel stopped with a jerk, and I was dropped, losing 99% of my accumulated wealth "- says Thor Borgolfsson in his autobiography Billions to Bust and Back (« Billions - to lose and return ", according to Forbes quote). In the spring of that year Icelander c fortune of $ 3.5 billion held the 249-th place ranking in Forbes.

CHP Borgolfssona chose the easiest path: declared himself bankrupt (according to the Icelandic edition Kjarninn, it was one of the largest personal bankruptcies in Europe). The son decided not to follow the example of the older generations (his grandfather was a bankrupt twice) and still reach an agreement with creditors.

Borgolfsson in Russia

climbing

Company "Baltic Bottling Plant" (later renamed "Bravo International") was established in 1994 in St. Petersburg by Icelandic entrepreneurs Borgolfssonom Thor, his father Borgolfurom Gudmundsson and Magnus Thorsteinsson. Initially the company produced lemonade "Crown" and low-alcohol cocktails Bravo. In 1998, "Bravo International" has built a brewery, which began producing beer "Bochkarev", "Hunting", Lowenbrau and Bear Beer. Beer "Bochkarev" first came down the assembly line in March 1999, and in the same year, the brand ranked third in St. Petersburg in terms of beer sales and the first place in popularity.

In 2000 the company "Bravo International" among the ten largest brewersRussia (with 4.2% of the beer market), and the volume of sales reached 1.5 million hectoliters of beer and 330 thousand. Hectoliters of alcohol cocktails. In the same year the beer "Bochkarev" has sold 80% of retail outlets across Russia (data from the company website). Already by the end of 2001, the company ranked fourth in the beer market in the largest cities of Russia with a market share of 8.4%.

Separation and sale

But the cocktail business gradually retreated to the sidelines ahead of competitors and Petrograd. As a result, it was decided to divide the beer and cocktail areas into two companies. In 2002, the beer business "Bravo International" was bought by the Dutch company Heineken of the huge Russian market of $ 400 million, and in 2003 renamed the "Heineken Brewery", a non-core cocktail area has been allocated a separate company "Bravo Premium" 51% of the shares owned by the Icelandic founders, 49% - Heineken. In 2005, "Bravo Premium" of "Russian Alcohol" was sold and allocated in a separate structure. Now "Bravo Premium" is a Polish vodka CEDS Group (she became the owner of all the shares of "Russian Alcohol" in 2009), owned by the bank "Russian Standard".

Return of the Viking

Under the agreement with the banks (including Deutsche Bank), signed in 2010, all personal property Borgolfssona (real estate, aircraft, boat, the Ferrari car) was sold, and the funds transferred to creditors. He thus remained a shareholder and Novator Actavis, but both companies expect a long restructuring with the sale of the assets, and dividends for several years and moved to creditors. As a result, Scandinavian lost assets worth $ 1.8 billion in the four companies.

But the first Icelandic billionaire decided not to give up and to restore their wealth. And he succeeded. Not without influence from Borgolfssona his compatriot, Sigurdur Olafsson, when it led the of Actavis, and in 2010 became executive vice president of the American manufacturer of generic Watson Pharmaceuticals, has achieved the merger of the two companies. In 2012, Watson has closed a deal to acquire Actavis for $ 5.6 billion and took the name Actavis. As a result, Borgolfsson as Forbes reports could by the middle of 2014and pay off all debts and at the same time retain a major stake in the company, which is the beginning of the year was worth $ 700 million (from October 2012 to March 2015, the shares of Actavis grew 3.5 times, the company's capitalization has reached $ 78 billion). In addition, he still has the remaining 25% stake in the Polish mobile operator Play, which he placed in a trust for his son.

Now living in London Borgolfsson again the only Icelandic billionaire: he is worth $ 1.27 billion, while the businessman claims that delivered a lesson from his personal crisis, "like an animal that learns to survive in the jungle." As an Icelander Forbes said he no longer intends to take huge loans, and plans to invest with partners in the industries that it knows well: telecommunications and pharmaceuticals. In January, his company Novator acquired 92% of a small wireless operator Nextel Chile. The transaction amount was not disclosed, but we know that for her the first time he took a modest loan of $ 60 million over the past seven years.

Borgolfsson in figures

$ 3.5 billion has reached the state of the Torah Borgolfssona in March 2007yes

90% state Icelander lost during the financial crisis

The $ 1.27 billion estimated his wealth today

$ 400 million for the same amount in 2002, Heineken acquired the Icelandic beer business "Bravo International"

$ 78 billion of market capitalization of Actavis, about 1% of which belongs to the Torah Borgolfssonu

The 7 times increased the cost of shares of Actavis since 1999

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