The core rights and television arm of Kirch, the crisis-hit German media giant, was yesterday was turned over to administrators and new management, after creditors and shareholders failed to agree a rescue plan.
The move spells the end of Leo Kirch's control of the business he founded in the 1950s and could hand his empire, which owns major chunks of Germany's media industry, to the country's banks that lent to it so heavily.
The insolvency of KirchMedia came after weeks of fruitless talks about restructuring Kirch between the banks and strategic investors in the company, led by Rupert Murdoch's News Corp and Silvio Berlusconi's Mediaset. Kirch is estimated to have debt and contingent liabilities of some ¤10bn (£6.1bn). The administrators now have three months to restructure KirchMedia.
It had been speculated that the insolvency would mean that a wholly German solution to Kirch's liquidity crisis would now be imposed. But Wolfgang van Betteray, one of the administrators, said Mr Murdoch and Mr Berlusconi had not been sidelined.
Kirch's ailing pay-TV business, Premiere narrowly avoided following its sister into insolvency, when an unidentified investor asked to resume refinancing talks yesterday. The fate of the third arm of the Kirch empire, which owns the rights to Formula One racing, remains unclear.Reuse content