Apr 20, 2009
German retailer Arcandor needs 900 million euros
Apr 20, 2009
BERLIN, April 20, 2009 (AFP) - Troubled German retail group Arcandor said Monday it needs new loans of up to 900 million euros (1.2 billion dollars) from banks and the state in order to survive the recession.
Photo: AFP/DDP/Volker Hartmann
The firm, already teetering on the brink before Germany began to be hit late last year by its worst downturn since World War II, said it needed the money over the next five years to pay for a make-or-break revamp.
As a first step, Arcandor's new chief executive Karl-Gerhard Eick said that as a prelude to their possible sale or restructuring, it was putting into a new unit businesses that are not part of three new core business areas.
These included prestigious department stores such as KaDeWe in Berlin and Hamburg's Alsterhaus that the Bild daily said might interest Harrods owner Mohamed Al-Fayed or France's Galeries Lafayette.
Arcandor will retain 81 of its Karstadt department stores, which together with most of its Internet and mail order unit Primondo and its majority stake in tourism group Thomas Cook will form the company's core.
To turn the company around however Arcandor said it would need up to 900 million euros over the next five years, in addition to a 650-million-euro credit line that has to be refinanced later this year.
Arcandor said that most of the new loans would come from banks but Eick reiterated comments made earlier this month that it was considering tapping a fund set up by the German government to help firms hit by the downturn.
"We are confident that we will be able to secure the long-term financing of the group... with the banks, shareholders, employees and all other stakeholders," Eick said.
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