Rumours of the demise of the UK wholesaler Phoenix seem to have been greatly exaggerated says the firm which is part of the huge conglomerate that German billionaire Adolf Merckle is battling to keep afloat.

The past month has seen Mr Merckle embroiled in a fight to keep his businesses going after a bad bet on Volkswagen shares cost the financier some 400 million euros, according to various sources. That sparked speculation that assets would have to be released to free up cash and it was rumoured that two of his main businesses – Phoenix and the generics major Ratiopharm – were up for sale or were even facing bankruptcy.

However Paul Smith, chief executive of Phoenix Medical Supplies in the UK, noted that “recent news in Germany surrounding the Merckle family, whilst interesting, does not relate directly to the Phoenix UK business”. In a statement emailed to PharmaTimes, he noted that the latter “is an exceptionally strong and profitable business”, noting that Phoenix has just signed supply deals with Eli Lilly and Janssen-Cilag. Furthermore, “we fully expect to be included in other reduced wholesaler models in the near future”, Mr Smith added.

He went on to say that “it is not Phoenix’s normal practice to respond to rumour in the market place”, but “I seek to assure all of our partners, customers and employees that recent rumours of the insolvency of the UK Phoenix business are completely unfounded and untrue”. He said that “in what can seem a confusing situation”, the firm’s directors are continuing to concentrate on thebusiness “and we will continue to have a successful business for the foreseeable future”.

Back in Germany, Mr Merckle has made creditor banks a new offer in talks to secure new loans to get out of its liquidity crunch, according to the Frankfurter Allgemeine Zeitung. The newspaper said the banks are looking for stakes in Phoenix, Ratiopharm and the construction materials group HeidelbergCement to be provided as collateral and quotes Mr Merckle as saying that “we are ready to do this if we can get the loans that are needed”.