The sale of shares Kirch holds in Axel Springer Verlag will not be agreed this week as planned. And Kirch's pay-TV holding company followed in the footsteps of its core rights unit and filed for insolvency.
Leo Kirch's film archive was the cornerstone of his media empire - but it won't save him now.
The sale of shares held by beleaguered media giant Kirch Group in publishing group Axel Springer Verlag AG is proving more difficult than expected. According to information obtained by Handelsblatt, Commerzbank has postponed until sometime next week an agreement, originally due Friday, with its co-consortial banks on the pricing of Kirch's 40% stake in Springer.
The Springer stake was used by Kirch as collateral against a 720 million euro loan from Deutsche Bank, which the bank called in on April 12. Under the conditions of the loan, Deutsche can utilize the collateral from Friday. "We are mostly concerned with the repayment of the loan," people close to Deutsche said Thursday. "One or two days won't matter," they added. But if fundamental problems became apparent, the bank would take action.
The consortium headed by Commerzbank was to include Dresdner Bank, Bayerische Landesbank and Axel Springer's widow, Friede. Deutsche Bank had been mooted as the fourth partner, but its participation is now considered unlikely, according to people familiar with the matter.
Meanwhile, on Thursday, Kirch Group's pay-TV holding company followed the core rights unit Kirch Media in filing for insolvency. The filing does not include the group's flagship pay-TV channel Premiere World, which is held by a separate, wholly owned company and will remain on air for the moment.
"The transmission operations of Premiere are not in danger," said Kirch Pay TV head Georg Kofler in a statement. "We are still offering our subscribers the programs as listed," he added.
Premiere programs are set to include the Mike Tyson/Lennox Lewis boxing match next month and World Cup soccer.
Kofler said Premiere has enough cash to last only until the middle of June. He said Premiere would return to negotiations in the coming weeks with its business partners to drastically cut costs, while he plans to present results of the talks by June, and approach potential investors thereafter.