Essen, Germany - Arcandor, a German company which operates department stores, mail-order services and charter holidays, applied Friday for an emergency loan of 437 million euros (620 million dollars) from the German government. Government officials met Arcandor and bank executives at the Economics Ministry after the application, but reached no decision.
Arcandor is seeking the six-month loan from a federal bank charged with rescuing industrial enterprises crippled by the world recession.
At its head office in Essen, Arcandor said it needed the loan to pursue talks on merging its Karstadt department stores with those of another German business group, Metro AG. Arcandor says its current bank loans will run out on June 12.
German Economics Minister Karl-Theodor zu Guttenberg reportedly urged Arcandor to apply for the emergency loan and restructure, rather than pursue a separate request for a government guarantee of 650 million euros to help Arcandor gain new bank credit.
While Chancellor Angela Merkel's Social Democrat coalition partners have backed state aid to save jobs at Arcandor, pro-business groups have said it would be better to shrink the stores business and sell the remainder of it to the Metro's Kaufhof chain.
The company website says 28.6 per cent of Arcandor shares are controlled by the Sal. Oppenheim bank, while heiress Madeleine Schickedanz and her family control 26.7 per cent.
Thomas Steg, a government spokesman, said Oppenheim and Schickedanz ought to assist Arcandor with their own assets.
