Merckles May Surrender 53 per cent stake in HeidelbergCement to banks

Merckles May Surrender 53 per cent stake in HeidelbergCement to banks
Published: 22 December 2008

Germany’s billionaire Merckle family may be forced to surrender a 53 per cent stake in HeidelbergCement AG to banks, part of last-minute efforts to keep its investment companies afloat, three people familiar with the situation said.

A group of more than 30 banks led by Commerzbank AG, Deutsche Bank AG, Royal Bank of Scotland Group Plc and Landesbank Baden- Wuerttemberg demanded the stake in return for a €700m(US$971m) refinancing package for the family’s Spohn Cement GmbH investment unit, said the people, who declined to be identified as the plan isn’t public.

Adolf Merkle,74, has an estimated US$9.2bn fortune that puts him 94th on Forbes’ list of the world’s richest people this year. He has sought emergency funding for more than two months as the family’s spiraling debts threaten holdings including Spohn, drug wholesaler Phoenix Pharmahandel AG and the Vem Vermoegensverwaltung GmbH investment unit, which owes banks about €5bn after wrong-way bets on Volkswagen AG and other stock trades, the people said.

Under terms of the offer sent late Dec. 19 to the Merckles, the banks agreed to keep the HeidelbergCement stake in one block with the aim of selling the shares in a coordinated action to a strategic investor when stock markets recover, possibly in the third or fourth quarter of next year, the people said. Dividends paid by HeidelbergCement would be lodged in a pledged account and used to pay down the debt, the people said.