Berlin - The German federal government agreed late Monday to
a life-sustaining loan to one of Europe's biggest mail-order
companies, Quelle, after its parent had declared insolvency.
The government is to instruct its KfW bank to extend a loan of 25
million euros (35 million dollars), matching a further 25 million
euros from two German states, to finance Quelle's day-to-day
operations during insolvency until December 31.
The two states, Bavaria and Saxony, will remit the funds to
Quelle, a subsidiary of Arcandor group, on Tuesday, an official said.
Berlin officials said they expected the European Commission to give
its blessing in the course of Tuesday.
Though Quelle's troubles pre-date the recession, its insolvency is
widely perceived as emblematic of the downturn.
An insolvency administrator, Klaus Hubert Goerg, is expected to
seek a new owner or investor for Quelle, which has its main office in
the city of Fuerth. Goerg said he hoped it would be possible to
restructure Quelle but cautioned this would not be easy.
Quelle, the keystone of Arcandor's web of mail-order and online
vendors in 28 nations, declared insolvency on June 9.
Until the 1989 fall of Communism, Quelle's 1,000-page mail-order
catalogues were the bible of clothes and home appliances for East
Europeans behind the Iron Curtain. Most German households own a few
low-priced Quelle products, but the company's appeal has faded.
Today, Quelle takes web orders, but younger Germans perceive
Quelle's 70,000 wares as faintly out of date. Its has just published
its winter catalogue using borrowed funds.
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