Germany's fifth richest person, Adolf Merckle, has been trying to raise some cash after losing a billion euros on VW stock deals. In these tough times, even the super-wealthy aren't protected against getting soaked.
Billions were made -- and lost -- when VW shares briefly went ballistic
VW stocks went on a wild ride at the end of October, at one point breaking the 1000-euro ($1,264) mark before plummeting back down to earth.
But Adolf Merckle and his family, who had bought options predicated on the idea of VW share prices falling, got run over. Now the family holding company is trouble.
"The [holding company] too has suffered under the extreme turbulence in the financial markets in the past few weeks," Merckle's son Ludwig confirmed to DPA press agency on Tuesday, Nov. 18.
The family is reported to have lost as much as one billion euros as it was forced to buy up inflated VW shares. Adolf Merckle's personal wealth has been estimated at $9.2 billion.
Adding to the family's woes is the fact that the Merkel Group, a consortium that includes major cement and pharmaceuticals companies, is reported to be in debt to the tune of 16 billion euros.
Now one of Germany's top billionaires is facing the unusual challenge of a personal cash crunch -- and the state is not yet stepping in.
Billionaire Merckle is now trying to see about a loan
Adolf Merckle met with the economics minister of the state of Baden-Wuerttemberg, Ernst Pfister, to discuss the financial troubles of the consortium, which employs some 100,000 people.
But if it was a loan he was after, he was disappointed.
"We are confident that the banks and the corporation will find a solution," Pfister told DPA after that meeting.
Baden-Wuerttemberg's State Premier Guenther Oettinger has said his government is monitoring the situation.
"We'll be following this topic intensely but prudently," Oettinger said. "The employees can't be left standing there like idiots for something that's the fault of company directors."
Ludwig Merckle said the company had discussed its need for capital with some 40 banks.
"Various options are being examined in order to ensure that debts are reduced responsibly," Merckle told the daily Suedwest-Presse newspaper.
The plans could include selling off some of the Merckle Group's prime subsidiaries -- in a sign that not even the super-rich can avoid tightening their belts during the economic crisis.