Kirch ready to sell F1 stake

February 20, 2002 Posted: 1211 GMT

LONDON (CNN) -- Kirch, the cash-strapped German media group, has put its stake in Formula One up for sale to pay off debts.

Leo Kirch, the media mogul, has conceded the sale is necessary otherwise his empire could be spilt apart as banks and other investors push for a break up to recover loans made to the company, the Financial Times said on Wednesday.

Kirch advisers are set to seek offers for the company's 58 percent stake in SLEC, the company that controls broadcasting and marketing rights to Kirch's Formula One motor racing business, by the end of the week.

British billionaire Bernie Ecclestone, former owner of Formula One, is thought to be mulling a bid to buy the business back for as little as $800 million, the FT said.

But Kirch told CNN that the report was "pure speculation" and it had no plans to sell the business but was looking for "new equity shareholders" among the automakers. Kirch has been looking for some time to involve the likes of BMW/Williams, Mercedes/McLaren and Renault in the running of the sport.  

Kirch is also ready to offer Rupert Murdoch's News Corp a substantial stake in Germany's biggest TV business to pay off debts to the Australian-born businessman, the FT said.

The German company's attempts to build a pay-TV platform has left it seeking funds to cover losses and meet an obligation to pay £1 billion ($1.4 billion) in cash to Murdoch for his stake in TV business Premiere.

Kirch management has held internal discussions about a deal that would give Murdoch "significantly increased influence" over flagship TV business KirchMedia, its core rights and broadcasting business, the FT reported.

Kirch is set to approach Murdoch about a deal by the end of this week.

Earlier this month, Murdoch's British Sky Broadcasting  wrote off its investment in Kirch's pay-TV company but could still force Kirch to buy-back the 22 percent stake. Other creditors, including Deutsche Bank and Dresdner Bank, want their money back.