Icelandic investment firm Baugur Group has moved to alleviate concerns about its fashion brands in the UK after the collapse of three Icelandic banks this week.

The company, which controls a large stake in the UK high street through Unity Investments, insisted that loan facilities for its UK portfolio were unaffected by the domestic banking turmoil.

Baugur Group CEO Gunnar Sigurdsson said: "The financing of the companies in which we hold investments in the UK is unaffected [by the current situation in the Icelandic banking sector].

"Our portfolio companies have committed loan facilities with Icelandic and other international banks, which commitments may not be revoked or altered by those banks unless done so in accordance with the agreed terms of those loan facilities.

"Also the businesses are performing well and the portfolio is generating strong cash flows, which is key in markets like this. Our operational assets are strong."

Icelandic banks Glitnir, Landsbanki Island and Kaupthing were nationalised this week after going into receivership amid spiralling debts and pressures from the ensuing meltdown of global markets.

In addition, UK customers of Landsbanki's IceSave subsidiaries were unable to access savings, while local authorities in the UK also have cash tied up in the troubled Icelandic banks.

In the UK, Baugur's principal investments include fashion chains Whistles and Jane Norman, Mosaic Fashions - including the Oasis, Warehouse and Karen Millen retail brands - and UK department store chain House of Fraser.

Baugur also has stakes in Debenhams, Moss Bros and French Connection.

In a statement emailed to just-style today (10 October), Sigurdsson added: "In response to developments in the Icelandic banking sector, we would like to make clear that this will have no impact on Baugur's operations or its portfolio companies.

"In the individual cases where Icelandic banks may have to sell shareholdings in our portfolio companies, we would like to emphasise that these are all minority shareholdings.

"For each portfolio company, if a shareholder wishes to sell their holding, standard pre-emption clauses apply providing the other shareholders with the right to acquire that stake in proportion to their shareholding.

"Should an Icelandic bank sell all or part of their minority shareholding, there would be no impact on the successful day-to-day operations and performance of these companies, but would only change the ownership structure."

By Joe Ayling, news editor.