Most expensive work at Christie's auction, by Gerhard Richter, fails to make minimum price

LONDON (Reuters) - An auction of mostly German and Austrian contemporary art to raise emergency cash to bail out the Essl Museum in Austria generated its own drama at Christie's on Monday when the most expensive work failed to make its minimum price.

There was a noticeable tension in the room when Jussi Pylkkanen, the auctioneer and president of the auction house's European region, gave a "pass" to German painter Gerhard Richter's large 1985 canvas Netz (Net) after it received a top bid of 5.8 million pounds (S$11.84 million), below a minimum price of 7 million pounds, thus removing the work from the auction.

After an unusually long delay before beginning the post-auction press conference, Christie's officials emerged to say that the Richter had been sold following the auction, to an undisclosed buyer, for 5.5 million pounds.

This avoided Christie's having to carry the painting on its books, since it had given a house guarantee for the sale of all the works. "I can announce that also the Richter abstract Netz has sold ... after the sale for 5.5 million pounds," Mr Francis Outred, director of Christie's post-war department, said.

The sale of what originally was set to be 44 pieces from the Essl collection had been touted as one of the most valuable auctions of a private collection of contemporary art ever staged in London.

The auction generated almost 47 million pounds in sales, well within the pre-auction estimate of 40-60 million pounds, even without the Richter, which carried a top estimate of 10 million pounds.

A spokesman for the Essl Museum told Reuters before the sale that the proceeds would be used to refinance a loan that Austrian construction tycoon Peter Haselsteiner used to buy an interest in the art collection from struggling home improvements millionaire Karlheinz Essl, who founded the museum. "This is now a means to refinance a big part of the loan," the museum spokesperson said, adding that many valuable pieces remain in the collection and "this is not a sellout".

The most expensive work sold during the auction was another Richter, Wolken (Fenster) (Clouds (Windows)) which went for 6.24 million pounds, including the buyer's premium.

In a statement released by Christie's, Essl said it had not been easy for him to part with the 44 works that were put up for auction, one of which was withdrawn before the auction and three of which did not meet the minimum, including the Richter.

Essl said that he and his wife Agnes "are equally delighted that through the proceeds of this sale, the long-term future of the Essl Museum is now secured".

According to newspaper reports, a new firm owned 60 percent by the Haselsteiner family foundation and 40 percent by Essl family vehicles would pay more than 100 million euros (S$161.57 million) for the collection. The money would be used to shore up Essl's struggling BauMax home improvement chain.

Austria in April turned down Essl's request to buy the 7,000-piece collection, rejecting his argument that 4,000 of more than 9,000 jobs in his company were at risk if it did not do so.