Merckle makes banks new offer in debt talks

Merckle makes banks new offer in debt talks
Published: 10 December 2008

German tycoon Adolf Merckle has made creditor banks a new offer in talks to secure fresh loans his family needs to escape a liquidity crunch, he was quoted on Tuesday as telling a German newspaper.

"We submitted a new offer to banks on Monday and are still working with them to find a solution," the Frankfurter Allgemeine Zeitung quoted him as saying in an interview, parts of which were released ahead of publication on Wednesday.

The Merckle family controls generics drug maker Ratiopharm, construction materials group HeidelbergCement and drug wholesaler Phoenix. Merckle said banks wanted stakes in these companies to be provided as collateral.

"And we are ready to do this if we can get the loans that are needed," he said.

Philipp Daniel Merckle, former chief executive of Ratiopharm and son of Adolf Merckle, told Reuters last week he expected Ratiopharm to be sold to relieve the cash crunch.

Banking sources had earlier told Reuters that Adolf Merckle lost 400 million euros ($515 million) with bad bets on carmaker Volkswagen shares and other trades.

Analysts have said a divestment could bring in no more than twice Ratiopharm’s annual sales -- so about 3.6 billion euros -- due to strained financial markets and uncertainty over a regulatory overhaul of the German generics market.

In the newspaper interview, Merckle said the share transactions that landed the family in its predicament were typical of what it had done successfully for decades.

"I have already survived many so-called market crashes," the 74-year-old businessman said. "But I could not have expected a banking and financial crisis of this magnitude."

Source: http://www.afxnews.com