Uncertainty hung over the future of Baugur’s interests in quoted companies after the investor was placed in the Icelandic equivalent of Chapter 11.

Alongside stakes in private companies, Baugur holds positions in listed retailers Debenhams and French Connection. Both retailers’ shares fell on Wednesday as news emerged of Baugur’s latest difficulties.

Baugur’s holdings were primarily through contracts for difference and ultimately held by Landsbanki, the bank which fell out with Baugur as debt renegotiation talks failed.

Some City observers believe Landsbanki – control of which was seized last autumn by the Icelandic government – may well be tempted to sell its holdings in UK retailers.

Any sale of Baugur’s 13 per cent stake in Debenhams might cause problems for the retailer, which is understood to be planning a new equity fundraising and debt restructuring.

KBC Peel Hunt analyst John Stevenson said the future of the holding was an issue, but should not be overstated. He said: “It’s not going to help any potential fundraising, but the Baugur situation has been on the cards for about six months.”

A source close to Debenhams said Baugur’s problems would not affect the department store group and declined to comment on the likelihood of an equity issue.

French Connection confirmed that Baugur has a 17.9 per cent stake in the chain through investment vehicle Unity and that there will be no impact on it.