Kirch Tells Investors of Sell-Off Plans

21 February 2002

Embattled media mogul Leo Kirch, whose debt-crippled Kirch Gruppe empire has been slowly slipping from his grasp in recent weeks, yesterday (Wednesday) met with investors in Munich to discuss a programme of divestments.

At the meeting were representatives of Kirch’s investors and bankers, plus some from NewsCorp, which wants to cash in its stake in the group’s pay-TV unit for €1.7 billion.

In order to meet its obligations, Mr Kirch revealed his group is in advanced negotiations about offloading its 25% holding in Spanish broadcaster Telecinco. Meanwhile, banking firm HVB Group is interested in buying its 40% stake in newspaper giant Axel Springer Verlag for €1.2bn.

The latter deal, however, has run into a potential three-week delay, as it emerged the buyer wants Kirch’s eight leading creditors to agree on how the cash should be spent before it puts pen to paper.

As revealed yesterday [WAMN: 20-Feb-02], Kirch has also put its majority holding in Formula One motor racing up for sale, and is considering offering NewsCorp a stake in the KirchMedia division to help settle its debt.

However, NewsCorp may insist on cash. Rupert Murdoch – who, it emerged, has been in Germany this week on what one insider called a “top-secret visit” – yesterday confirmed the group would be exercising its option to offload the pay-TV holding and was unwilling to take any further stakes in Kirch’s operations.

“NewsCorp has made a firm and final decision not to make any further investment in either Premiere [the pay-TV unit] or KirchMedia,” he declared.

Data sourced from: Financial Times; additional content by WARC staff