REFILE-Merckle sets Friday deadline in debt talks -sources

(Refiles to fix ‘deadline’ typo in headline)

FRANKFURT, Dec 11 (Reuters) - German tycoon Adolf Merckle has given creditor banks a Friday deadline to accept his conditions for a deal his family needs to escape a liquidity crunch, sources familiar with the matter said on Thursday.

“If not, he could put his VEM investment company into insolvency,” one banker involved in the process said.

“Merckle is doing his utmost to get the banks to move,” another banker said.

The move marks an escalation of debt talks with around 30 banks that have continued even after a payment moratorium expired last week. Merckle on Monday presented a new offer that he wants banks to adopt as the basis for a new financing deal.

He needs around 600 million to 1 billion euros ($1.3 billion) in fresh liquidity, sources have told Reuters.

The Merckle family controls generic drugs maker Ratiopharm, construction materials group HeidelbergCement HEIG.DE and drug wholesaler Phoenix.

VEM alone has a 25.5 percent stake in HeidelbergCement, whose shares were down 2.6 percent at 1125 GMT.

Banking sources had earlier told Reuters that Merckle lost 400 million euros through bad bets on carmaker Volkswagen's VOWG.DE shares and other trades.

A VEM spokeswoman declined to comment other than to say talks continued and that Merckle had offered stakes in Ratiopharm, Phoenix and HeidelbergCement as collateral.

Merckle owns around 80 percent in all of HeidelbergCement, which is saddled with debt it took on for acquisitions. (Reporting by Frank Siebelt and Philipp Halstrick, Writing by Michael Shields, editing by Will Waterman)