Fate of German mail-order firm Quelle hangs in the balance
The insolvent Bavaria-based company employs 8,000 workers in central and eastern Europe.Frankfurt -- The fate of insolvent German mail-order company Quelle could be set late on Monday, depending on whether the government decides to grant the group emergency aid.
Representatives of Quelle, the economy ministry and administrator Klaus-Hubert Goerg will try to reach a decision on an emergency loan worth 50 million euros (70 million dollars), a ministry spokesman said.
The Bavaria based company employs 8,000 workers in central and eastern Europe, he added.
A loan would be made however only if the state were sure of being among the first reimbursed in the event that Quelle, which is owned by the insolvent retail and tourism group Arcandor, was liquidated.
Because Quelle and Arcandor practice a centralised form of treasury known as cash pooling, the parent group has siphoned off surplus liquidity at Germany’s biggest mail order company.
If a loan is not granted, the firm which is 80-years-old, could go under.
It was created in 1927 by entrepreneur Gustav Schickedanz with the slogan "buy directly from the source," with the company's name Quelle meaning source in German.
The German states of Bavaria and Saxony, where some of Quelle's activities are located, have said they are ready to extend financial aid.
Bavaria is expected to contribute 21 million euros to a rescue package, with Saxony adding four million and the federal government set to provide the remaining 25 million, if it agrees to a deal.