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XL's West Ham connection XL's West Ham connection
(10 minutes later)
By Nils Blythe BBC Business correspondentBy Nils Blythe BBC Business correspondent
XL signed a three-year deal with West Ham last FebruaryXL signed a three-year deal with West Ham last February
The Icelandic chairman of West Ham United FC has a long connection with XL, the holiday group which has collapsed leaving tens of thousands stranded. When West Ham's players step out to play West Brom in the Premiership, they will do so in shirts carrying no sponsor's name, following the collapse of XL Holidays midway through a three-year £7.5m contract.
XL had a £7.5m, three-year sponsorship deal with the London football club. The Hammers have also suspended all sales of replica shirts and have started work to remove all XL branding from their Upton Park ground.
But the links to Bjorgolfur Gudmundsson, West Ham's chairman, run much deeper. The club's Icelandic chairman Bjorgolfur Gudmundsson has a long connection with XL, and the failure of the holiday group which has collapsed leaving tens of thousands stranded could end up costing the Gudmundsson family up to £200m. A big hit, even for people who are very wealthy by any standards.
And the failure of XL could end up costing the Gudmundsson family up to £200m. A big hit, even for people who are very wealthy by any standards.
Until 2006, much of the business which became the holiday group XL was owned by an Icelandic company controlled by Bjorgolfur Gudmundsson and his son Thor Bjorgolfsson.Until 2006, much of the business which became the holiday group XL was owned by an Icelandic company controlled by Bjorgolfur Gudmundsson and his son Thor Bjorgolfsson.
Family connectionsFamily connections
The son's business interests are even more extensive than the father's, and there are close connections between them.The son's business interests are even more extensive than the father's, and there are close connections between them.
In 2006 the XL travel business was sold to a buyout group led by Philip Wyatt.In 2006 the XL travel business was sold to a buyout group led by Philip Wyatt.
But the purchase was largely funded by a loan from the Icelandic bank Landsbanki, which is controlled and part-owned by the Gudmundsson family.But the purchase was largely funded by a loan from the Icelandic bank Landsbanki, which is controlled and part-owned by the Gudmundsson family.
Another Gudmundsson controlled company - Eimskip - guaranteed 207m euros (£164m) of the loan.Another Gudmundsson controlled company - Eimskip - guaranteed 207m euros (£164m) of the loan.
So, effectively, the Gudmundsson family sold their travel business, but provided much of the finance for the purchasers.So, effectively, the Gudmundsson family sold their travel business, but provided much of the finance for the purchasers.
Further support for XL came in the form of a loan of 45m euros (£35m) from Straumur, a bank controlled Thor Bjorgolfsson.Further support for XL came in the form of a loan of 45m euros (£35m) from Straumur, a bank controlled Thor Bjorgolfsson.
Earlier this week a group led by the Gudmundssons said that they would take liability for the financial guarantee given to XL.Earlier this week a group led by the Gudmundssons said that they would take liability for the financial guarantee given to XL.
On the face of it, this is a baffling transaction.On the face of it, this is a baffling transaction.
New sponsorNew sponsor
With XL on the brink of collapse why would businessmen who were well aware of the position offer this kind of guarantee?With XL on the brink of collapse why would businessmen who were well aware of the position offer this kind of guarantee?
The answer, according to sources familiar with the deal, is that they feared that the guarantee would push their company Eimskip to the brink. So they decided to take the loss privately.The answer, according to sources familiar with the deal, is that they feared that the guarantee would push their company Eimskip to the brink. So they decided to take the loss privately.
But the move illustrates how closely connected the Gudmundssons were to the fortunes of the XL group.But the move illustrates how closely connected the Gudmundssons were to the fortunes of the XL group.
The total loss from XL to Bjorgolfur Gudmunsson - the West Ham owner - and his son could reach 252m euros (£199m).The total loss from XL to Bjorgolfur Gudmunsson - the West Ham owner - and his son could reach 252m euros (£199m).
However sources close to the family estimate their overall wealth at well over £2bn.However sources close to the family estimate their overall wealth at well over £2bn.
West Ham fans will be hoping that this business setback does not prevent the club's owner from continuing to invest in the football club.West Ham fans will be hoping that this business setback does not prevent the club's owner from continuing to invest in the football club.
The club is now looking for a new sponsor.The club is now looking for a new sponsor.
The supporters are wondering what to do with replica shirts which have XL.com emblazoned across them.The supporters are wondering what to do with replica shirts which have XL.com emblazoned across them.