BERLIN (AFP)--German Finance Minister Peer Steinbrueck said
Monday the retail group Arcandor AG (ARO.XE), which owns the
Karstadt chain of department stores and a majority share of travel
company Thomas Cook Group PLC (TCG.LN), could go bust.
"A bankruptcy is not totally excluded," Steinbrueck told ARD
television, adding: "Shareholders must assume their
responsibilities" with respect to the group's long-running
problems.
Arcandor, which owns 52% of the travel group Thomas Cook, has
said it could file for insolvency on Monday unless it obtains
EUR437 million in credit from the government.
The company wants to tap a government fund set up to help
companies hit by Germany's worst postwar slump.
The group is also negotiating a possible merger however with
German rival Metro AG (MEO.XE), the biggest German retailer and
owner of the Kaufhof chain, though the talks have run into
obstacles.
Arcandor employs 50,000 staff but its call for state aid has
left many observers cold because its was already facing problems
before the global economic crisis hit Europe's biggest economy in
mid-2008.
The government, which recently backed a plan to save automaker
Opel (GMQM) the German unit of General Motors Corp (GM), said that
was an exceptional operation and that Arcandor must take
responsibility for poor management.
The European Commission has also expressed hostility towards
state aid for the German retailer.
German media reports said Sunday that Arcandor has stopped
paying rent on its department stores - owned by a group of
investors led by U.S. bank Goldman Sachs - on June 1.
Around EUR600 million worth of loans to the retailer come up for
refinancing Friday.