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Business

Timeline of a Downfall

The eleventh-hour fight to save Kirch Group, drowning in debt, began in earnest in December 2001 but ended only five months later.

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Leo Kirch's film rolls storage

In an emotional farewell to staff on Monday, Leo Kirch acknowledged his failure to make his media empire, Kirch Group, into the successful model he had envisaged. "I wanted to create a vertically integrated media organisation, both audio and visual, not just a power hub... It could still be successful," he said.

Here is a chronology of the fight to save the group, as reported by Reuters.

Dec 9, 2001 - Kirch sources say the debt-ridden group is working on a defence against an imminent hostile takeover bid by Rupert Murdoch's News Corp. Sources say situation critical.

Dec 11 - Dresdner Bank demands repayment of a 900 million mark ($400 million) loan, but three days later extends the credit until January 15.

Dec 21 - KirchMedia Chief Executive Dieter Hahn puts a figure on the group's debt burden for the first time, telling Reuters it ranged between 11 and 12 billion marks ($5.05-5.5 billion).

Jan 15, 2002 - Dresdner Bank extends its loan to April.

Jan 16 - Publisher Axel Springer demands 767 million euros from Kirch, saying it intends to exercise a put option to sell its 11.5 percent stake in free-to-air television firm ProSiebenSat.1. It gives Kirch until April to pay. Kirch questions the legality of the option.

Feb 5 - Deutsche Bank Chief Executive Rolf Breuer expresses doubts about Kirch's creditworthiness.

Feb 8 - Rupert Murdoch's BSkyB Plc says it will not renegotiate its 1.7-billion-euro option to sell its 22 percent KirchPayTV stake back to Kirch and will concentrate on getting its money back. But it says it will take a one-billion-pound ($1.4 billion) charge to write off the stake.

Feb 11 - Sources say HVB Group is prepared to help Kirch out of a cash crisis by buying its 40-percent stake in Axel Springer for more than one billion euros.

Feb 14 - A source tells Reuters Kirch is ready to sell off its prized Formula One stake to keep its core business together.

Feb 22 - KirchMedia is forced to put a merger with ProSieben, planned for June, on ice.

March 8 - Kirch says sale of ProSieben is not an option.

March 19 - Banking sources say Kirch needs extra liquidity of 500-600 million euros to keep core KirchMedia business going.

March 20 - Kirch unveils plans to make its loss-making Premiere pay-TV unit profitable by 2004. It abandons plans to merge KirchMedia with ProSieben.

March 23 - Sources say Leo Kirch may relinquish his majority stake in KirchMedia. They say creditor banks are in talks with minority stakeholders including Italian Prime Minister Silvio Berlusconi's Fininvest and Mediaset and Murdoch's News Corp. The banks look set to provide a 800-million-euro capital increase in return for a majority stake in KirchMedia.

March 24 - Sources say small stakeholders in KirchMedia, led by Murdoch, want a larger stake, which could result in Leo Kirch losing control of his media empire.

March 26 - Leo Kirch demands an interest in the World Cup soccer broadcasting rights in return for relinquishing control of KirchMedia, sources say.

March 27 - Bankers say Kirch's core television business needs 150 million euros to survive the next six weeks, but they struggle to agree with minority shareholders on a rescue involving an emergency loan and a capital injection.

April 2 - Banks and investors fail to agree a bailout, and sources say it looks more likely that Kirch will go into administration in coming days.

April 5 - Kirch is poised for insolvency as talks on bothsides of the Atlantic fail.

April 8 - A Munich court confirms that Kirch's core rights and television unit, KirchMedia, had filed for insolvency, which places the company in the hands of an administrator.

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