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Business Briefs

April 17, 2003

Government refuses Lufthansa guarantee; SAP increases market share; Bayer agrees to pay huge settlement for fraudulent activities.

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Lufthansa will have to cover its own risks due to terrorism.Image: AP

Government refuses Lufthansa aid

The German government on Thursday refused to extend a guarantee for German airline Lufthansa for potential risks caused by terrorism. After the attacks in the United States on September 11, 2001, Germany offer the guarantee to help prop up the ailing Lufthansa. The airline had asked the government to cover $2 billion (€1.8 billion) in potential damages before the begin of the war in Iraq. But on Thursday, German Finance Minister Hans Eichel said he could no longer perceive a market-wide failure for such risk coverage. Lufthansa said it "regretted" the decision.

SAP increases market share as sales slump

Germany's SAP on Thursday reported a 12 percent drop in first-quarter revenues, but Europe's largest software maker said it was able to increase its worldwide market share despite tough business conditions. The Walldorf-based company said its share of software revenues increased three percentage points to 54 percent of the world market over the past three months. Strict cost-cutting enabled the firm to boost earnings in spite of slumping sales. Earnings before interest, taxes, depreciation and amortization (EBITDA) for the first quarter of 2003 rose to 348 million from 240 million a year ago. Net income rose to 60 euro cents a share from 21 cents a year ago, SAP said.

Bayer admits to fraud

Chemical and pharmaceutical company Bayer agreed to pay $257 million in an out of court fraud case settlement in the United States. The firm admitted to setting inflated prescription drug prices for Medicaid, a state healthcare aid program for poor people. Bayer was accused of using a trick to avoid charging the lowest possible prices, as U.S. law stipulates.