Gunnar Sigurdsson, former managing director of collapsed Icelandic retail group Baugur, has been asked to stand down from the board of Iceland Foods so Landsbanki can take full control of the sale of its stake in the retailer.

Sigurdsson has been replaced by Larentsinus Kristjansson, head of the Landsbanki committee charged with selling its assets in the business, according to The Telegraph.

Landsbanki put its 67% stake in Iceland up for sale this year, which it inherited following the collapse of Baugur in the financial crisis. It is estimated to be worth as much as £1.2bn.

Iceland’s sales memorandum is expected to go to potential bidders in six weeks’ time.

Landsbanki commissioned Ernst & Young and Linklaters to carry out financial and legal due diligence on the business, which is expected to form the backbone of the memorandum.

UBS and Bank of America Merrill Lynch will run the sale process.

Iceland founder Malcolm Walker, who has 23% of the business, is expected to bid and has appointed Rothschild to find backers.