WRAPUP 1-Arcandor fears for Quelle as rival squares up
* Quelle needs 50 mln euro state loan guarantees within days
* Neither Quelle nor Karstadt needs insolvency loan
* No fire sales ahead of insolvency proceedings open
* Otto says not interested in Quelle but other units
* Arcandor shares rise more than 10 percent
(Combines separate stories on Otto and Arcandor)
By Eva Kuehnen
ESSEN, Germany, June 18 (Reuters) - The main priority of bankrupt German retailer Arcandor (AROG.DE) is to shore up its Quelle mail-order business, the insolvency administrator said on Thursday, while rival Otto positioned itself for a deal.
Valovis bank, which solely finances the flow of payments between customers and Quelle, needs state loan guarantees of about 50 million euros ($69.78 million) within days, a spokesman for the administrator said. The bank declined to comment.
He added that Quelle did not need an insolvency loan and neither did Arcandor's department store unit Karstadt.
Quelle needs cash from the bank to publish its new catalogue for the fall/winter season and to order new goods.
Public support for Quelle's bank would be most welcome, administrator Klaus Hubert Goerg told reporters, adding that he had been in talks with Berlin and Munich about guarantees.
A senior German government official told Reuters Berlin a decision should come before the weekend. [ID:nBAT003033]
Losing Quelle would be a blow to Arcandor chief executive Karl-Gerhard Eick's push to avoid a break-up of the company.
Without Quelle, Arcandor -- which filed for insolvency last week after the government rejected its calls for state aid -- would be left with its department store unit Karstadt and its near 53 percent stake in travel company Thomas Cook (TCG.L).
At an evening event in Frankfurt on Wednesday Eick had said stabilising Quelle was the top priority at the moment. He emphasised his ambition was to save Arcandor with a structured insolvency proceeding, maintaining all three business areas.
"We as a company may have certainly lost a battle but not the war," Eick said.
Arcandor shares were up 7 percent at 0.74 euros by 1514 GMT, when the German mid-cap index .MDAXI was up 0.5 percent.
NO FIRE SALES
On Thursday the privately-held German group Otto, the world's biggest mail-order group, reaffirmed it would be interested in the speciality mail order companies of Arcandor's Primondo unit and Karstadt sporting goods stores should they come onto the market. [ID:nLI392864]
But Chief Executive Hans-Otto Schrader told the Otto group's annual news conference he was not interested in Quelle, which he said would be difficult to turn around.
And Goerg made clear there would be no quick divestments at Arcandor before insolvency proceedings officially open, most likely on Sept. 1.
"Until then, fire sales are not on the agenda, neither to Metro nor to other interested parties," Goerg said.
German retailer Metro (MEOG.DE) has said it would be interested in acquiring 60 of Karstadt's 90 department stores. Eick also said a merger of Arcandor's Karstadt department store business with Metro's Kaufhof was not now on the agenda. ($1=.7165 euros) (Additional reporting by Jan Schwartz in Hamburg and Gernot Heller in Berlin; Editing by Greg Mahlich)
