German Govt rescues Hypo Real Estate

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German Govt rescues Hypo Real Estate

London, October 6: : The German Government along with banks and insurance companies has agreed on a new 50 billion Euro bailout plan for the troubled commercial property lender, Hypo Real Estate.

According to a report by German news broadcaster Deutsche Welle, the rescue came following a weekend of frantic negotiations after an earlier rescue plan for the embattled lender fell apart when a consortium of banks pulled out of the deal.

The earlier package had been for 35 billion Euro, the report added.

The report quoted the German Finance Ministry statement as saying that the new deal would see the financial sector topping up that sum with an additional 15 billion Euros.

"With this mutually agreed solution, the institution (Hypo Real Estate) will be stabilised and with it, Germany strengthened as a place to conduct finance in difficult times," the statement said.

While, German Finance Minister Peer Steinbrueck said he would not rule out increasing the government's guarantee for Hypo Real Estate which is worth almost 27 billion euros.

Hypo Real Estate has hailed the bailout, saying it would allow the company to keep functioning amidst the ongoing financial crisis.

"We are very thankful for the backing of all those involved," Hypo Real Estate CEO Georg Funke said in a statement.