An ugly break-up

8 June 2009 By Rachel Sanderson

A guesstimate of the German travel and trade group s sumofparts makes for ugly reading. Arcandor s stake in profitable Thomas Cook doesn t appear enough to offset its other weaknesses. Even in a prepack administration scenario all parties look in line for a haircut.

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The German government has turned down a request for state aid by Arcandor, the German trade and tourism group.

KarlGerhard Eick, Arcandor's chief executive, has said the company will become insolvent if it fails to win a state guarantee for a credit line due to be refinanced by June 12.

The credit line, worth E710m, is from Royal Bank of Scotland, Commerzbank and Bayern LB.

Arcandor owns a 53% stake in Thomas Cook, the Londonlisted travel and tourism company.

Thomas Cook shares rose 11% in morning trade on June 9. Arcandor shares were suspended from trading.

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