Kirch banks on UBS help

Warburg advising conglom on bankruptcy

COLOGNE — Kirch Media made investment bank UBS Warburg sole financial adviser for its bankruptcy procedures on Wednesday.

The investment company will assist the creditors’ committee, the interim trustee and the managing directors and help find investors for Kirch’s broadcasting and rights trading business.

“Commissioning UBS Warburg means that there is not only a possibility of restructuring by way of transferring business activities, but that developments … such as a plan for insolvency proceedings, are no longer ruled out,” Kirch Media said.

The core unit of the indebted Kirch media empire filed for insolvency in April after creditors and shareholders, including Rupert Murdoch’s News Corp. and Mediaset, failed to agree on a rescue plan.

Rescue feasible?

UBS will have to work out whether it is feasible to rescue all of Kirch Media, which would mean keeping ProSiebenSat 1 Media, Germany’s largest commercial broadcaster, tied to other parts of the business that have expensive rights deals with Hollywood studios and sports bodies.

Finding a new investor for a going concern that needs more than €1 billion ($903 million), could take months.

Mediaset interest

But Mediaset, controlled by Italian Prime Minister Silvio Berlusconi, is still sniffing around Kirch assets.

Its finance chief, Marco Giordani, said Tuesday that it could be interested in two of the four channels run by ProSiebenSat 1. Kirch Media owns 52% of ProSiebenSat 1.

“What we are looking to do is to invest at a cheaper price. This is the only … way that it will give us a sufficient return on a pan-European investment,” he said.

Kirch Media has debts of $1.4 billion and owes a further $500 million to Hollywood for movie rights.

(Reuters contributed to this report.)