German billionaire Adolf Merckle has taken a first step out of a financial crisis triggered by losses in speculative share trading, although any final deal with his banks looked set to diminish or even dissolve his cement-to-pharmaceuticals empire.

Mr Merckle’s VEM holding company said he had reached a deal with 40 banks late on Monday giving him a short reprieve from repaying loans which were due at Christmas. Talks on a new bridging loan and “sustainable” refinancing are due to close in January.