22,000 face axe as German giant falls

GERMAN engineering giant Babcock-Borsig has gone to the wall, jeopardising 22,000 jobs, after 11th-hour attempts to find a capital injection of £500m failed.

It is Germany's fifth large corporate meltdown this year and follows the failure of negotiations this week with principal bankers - a consortium of WestLB, Deutsche Bank, Dresdner Bank, Commerzbank, BHF-Bank and HypoVereinsbank - to produce an agreement supporting a restructuring plan.

Britain's Babcock sold its remaining stake in its former German affiliate in the 1970s, and has no links with the ailing firm.

Talks continue in the hope that the regional authority will cobble together a rescue plan. The federal government has also pledged limited aid. But it seems increasingly likely Babcock-Borsig will join the ranks of such giants as Kirch Media, Holtzmann and Dornier-Fairchild on the scrap heap.

A long-awaited move for French bank Credit Lyonnais by larger rival Credit Agricole loomed after the French government, which still holds 10.1% of Lyonnais, flagged a programme of asset sales.