Banks Clear Way for KarstadtQuelle Rescue

KarstadtQuelle said Wednesday that its creditor banks had cleared the way for the planned rescue plan of the troubled German department store operator. "We're assuming that nothing more is standing in the way" of the rescue package, KarstadtQuelle spokesman Jörg Howe said. KarstadtQuelle had been in talks with 16 creditor banks to secure a €1.75-billion ($2.3-billion) loan required to fend off possible insolvency. Norddeutsche Landesbank (NordLB) and the Landesbank Baden-Württemberg (LBBW) were the last of the banks to agree to provide long-term financing, which was seen as a prerequisite for a planned €500-million capital increase that shareholders were scheduled to vote on at an extraordinary general meeting next Monday. As part of a €760-million cost-cutting program, the crisis-ridden retailer announced last month that it would axe 5,500 jobs and sell off 77 department stores in a bid to return to profitability. (AFP)