The company's woes continue. A DM3.4 billion rescue package put together by Deutsche Bank and Dresdner Bank, its main creditors, was due to be approved by the rest on January 12th. The deadline was missed--and trading in the firm's shares suspended the next day--when some other lenders expressed reservations.
Among them should be doubt as to how on earth MG could have made such huge losses simply through what was presented as a hedging strategy that went wrong. MG's problems stemmed from its nifty idea of offering customers long-term, fixed-rate contracts for oil and oil products, such as heating and fuel oil. Demand for such contracts had increased as oil prices fell after the Gulf war in 1991 and users wanted to lock in cheaper supplies. By the middle of last year MG had entered into contracts that obliged it to supply a total of up to 160m barrels over the next ten years.