Deal to save Germany’s Hypo Real Estate fails

updated 8:28 p.m. ET Oct. 4, 2008

BERLIN - Germany's No. 2 commercial property lender, Hypo Real Estate Holding AG, said Saturday that a $48 billion rescue plan for the company had fallen apart after private lenders withdrew support.

Hypo said it would seek to stay in business through "alternative measures," but it did not say what those might be.

The company said it was "in the process of determining the consequences" of the rescue plan's failure, according to a statement.

Hypo was the first German blue chip to seek a government rescue after running into trouble in mid-September as credit froze on international markets.

The plan — approved on Thursday by the EU — would have entailed the German government injecting $37 billion and a "liquidity line to be provided by a consortium of several financial institutions," the company said.

"The consortium has now declined to provide the line," it said, without identifying the banks in the consortium. The government had said last week that none were foreign.

The German government had no immediate comment on the plan's collapse. A spokeswoman for German financial regulator BaFin also declined to comment.

More from msnbc.com Decking the hall? Watch out for dangers Palin draws hundreds at Iowa book signing Images: Picturing climate change   Slideshow: The making of SpaceShipTwo Giving back for the holiday season? Tell us how On Twitter: Breaking news updates | Weird and wild

MORE FROM ECONOMY AT A CROSSROADS

Economy at a Crossroads Section Front

Bernanke: Too soon to tell if recovery will last Obama to lay out plan to combat joblessness theGrio: Black teens' unemployment rate spikes NYT: U.S. forecasts smaller loss from bank bailout Unexpected drop in jobless rate fuels optimism Obama sees some consensus at job summit New jobless claims drop unexpectedly Bleak job scene poses challenge for Obama AIG slashes amount it owes U.S. by $25 billion Blacks fear path to middle class blocked Economy at a Crossroads Section Front   Add Economy at a Crossroads headlines to your news reader: