Kirch may sell Formula One

March 4, 2002 Posted: 1809 GMT

LONDON (CNN) -- KirchGruppe, the German media giant, may be forced to sell its stake in Formula One racing in an effort to cut it growing mountain of debt.

Dieter Hahn, a senior executive of the group, told Reuters on Monday the company is considering selling its interest in the sport, although it would prefer to find a partner to share the costs of F1.

"We would like to keep the Formula One stake and our preferred route would be to find a partner but it might have to be sold in the end," Hahn told Reuters. "We are in talks with a number of interested parties."

KirchGruppe controls the broadcasting and marketing rights to F1 through its 58 percent stake in the company SLEC.

The Munich-based group has been rumoured for months to be looking at a possible sale of the F1 rights, as its debts -- estimated to be more than $5 billion -- continue to mount.

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.

Hahn said KirchGruppe was in separate talks to find a new partner for its pay-TV unit, Premier, to replace Rupert Murdoch's British Sky Broadcasting, Reuters reported.

BskyB wants to sell its 22 percent stake in the loss making Premier.

Peter Chernin, chief executive officer of Murdoch's News Corp, said the group was anxious to cut its ties with Kirch. "We have no desire to make any additional investments in Kirch and we would like to get our money back," he told CNN.

Investors, including some of Germany's biggest banks, have been urging KirchGruppe to sell assets to reduce its debts or face possible bankruptcy.

Meanwhile, a privately held Spanish television channel Telecinco said on Monday it had called a shareholders meeting to approve the purchase of 10 percent of its shares from KirchGruppe.

KirchgGruppe currently owns 40 percent of Telecinco.

"We have called a shareholders meeting for March 20 and the first order od business will be authorizing the makeup of treasury stock [with the company buying] the maximum amount by law of 10 percent," a Telecino spokesman told Reuters.