Insolvency worries
June 19, 2009
Following a special sitting of its cabinet, the Bavarian state government said it was prepared to provide Quelle with more than 20 million euros ($28 million) to help it through the financial crisis.
"Bavaria will provide the biggest part of the guarantee, because most of Quelle's jobs are in Bavaria," a spokesperson for regional authorities told news agency AFP.
A total of 50 million euros is public guarantees is being considered by the federal government and German states, the Bavarian government said in a statement.
It is believed Quelle urgently needs an injection of 20 million to 25 million euros in order to print its spring-winter catalogue, without which the business would essentially fail.
Bavarian banks were to examine the offer Friday morning in the next step towards returning the business to solvency.
Should discussions between the banks prove successful, the temporary insolvency governor, Klaus Hubert Goerg, was scheduled to confirm the state-aid deal by midday Friday.
Goerg had earlier advised the federal and state governments in Berlin and Munich respectively that Quelle may need bailing out if it is to survive the troubles of its parent company, Arcandor.
dfm/Reuters/dpad
Editor: Jennifer Abramsohn