Kirch Admits to $5.06bn Debt Millstone

24 December 2001

Kirch Gruppe revealed the size of its debt millstone on Friday as its media division announced a third-quarter loss. Aggregated debt is between DM eleven and twelve billion ($5.06-$5.53 billion / E5.62-E6.14 billion), admitted group deputy chairman Dieter Hahn.

Accounting for DM4.3bn of the total, it emerged, is Kirch Media, the group’s broadcast TV and film rights unit. The extent of the indebtedness had hitherto been unclear as the company’s shares are not publicly traded.

Kirch Gruppe, mainly owned and wholly controlled by Leo Kirch, plans to restructure its free-TV media assets via a merger next year with Germany's leading commercial-TV broadcaster. ProSiebenSat1.

The group was less eager to spill the fiscal beans on its two other divisions – KirchPayTV which controls German pay-to-view channel Premiere; and Kirch Beteiligung, holder of the Formula One motor racing rights plus a slice of publisher Axel Springer. Premiere is known to be unprofitable and has been hard hit by the decline in adspend.

News source: Wall Street Journal