The sale of loss-making German airport Frankfurt-Hahn to a Chinese investor appears close to collapse, the airport's local government owner said on Wednesday, after the buyer failed to make an initial payment last week.

"Talks in Shanghai seem to point towards a collapse of the sale to (China's) SYT," said Roger Lewentz, the interior minister for the federal state of Rhineland Palatinate, which is the airport's main owner.

The owners of Hahn, a former military base now used mainly by budget airline Ryanair, had planned to sell an 82.5 percent stake to China's Shanghai Yiqian Trading Company (SYT).

However, Rhineland Palatinate said the company failed to make an initial payment last week, blaming a lack of Chinese regulatory approval for the money transfer.

Lewentz, alarmed by the missing payment, called on auditor KPMG to carry out due diligence on the buyer and dispatched a state secretary to China to investigate the company.

The secretary discovered in talks with Shanghai's municipal commission of commerce that SYT only contacted Chinese authorities for the first time on Tuesday, Lewentz said in a statement, adding no documents to seek permission for the money transfer had been filed.

Reuters has been unable to find contact details for SYT to seek a comment.

Lewentz said he continued to back the privatization of the airport, despite criticism from opposition politicians over the handling of the sale.

Talks with two unidentified bidders have resumed, he said, without giving details.

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