Apparently, the more than three dozen lenders involved could grant Mr Merckle’s investment vehicle a bridge-loan and at the same time force a sale of Ratiopharm a generic drugs maker However, it could be very difficult to find a buyer, as interested parties might struggle to obtain loans for a deal in the wake of the financial crisis.
The 74-year-old billionaire ran into severe financial troubles some weeks ago after VEM lost a large three-digit million-euro sum from betting on a falling Volkswagen share price. In addition banks demanded margin calls on a multi-billion loan that Mr Merckle used to finance his stake in Heidelberger Cement which he majority-owns.
Bankers said VEM had a debt burden of €5bn ($6.3bn). They also said Mr Merckle’s various holdings with more than 100 companies were "leveraged like a private equity company". However, VEM refused to comment on the amount of debt. It said recently in a statement that the banking crisis and the financial market turbulence have led to a "shortage of liquidity" at the group.
Mr Merckle surprised corporate Germany a few weeks ago when it emerged that the industrial patriarch got caught in the same extraordinary surge in VW’s share price that left many large hedge-funds reeling in October. His troubles provided yet another example of how Germany’s family-owned companies, once famed for their anti-cyclical and long-term approach to business, make use of short-term tactics or financial instruments that have only been attributed to hedge funds in the past. Mr Merckle owns a family empire that makes about €30bn in revenues and stretches from one of Europe’s largest cement makers to Germany’s largest generic drug maker.
