BERLIN — U.S. banks and Kirch Group creditors Lehman Bros. and J.P. Morgan are joining Germany’s Bayern LB in taking over kidvidder EM.TV’s stake in Formula One racing, EM.TV said Thursday.
Company agreed to sell its 16.7% stake in Formula One marketing company SLEC (via a 22.3% share in the Speed holding firm) to Bayern LB for the knockdown price of $9 million as part of an out-of-court settlement in February.
The kidvidder’s former management had pledged the stake to the banks for $1.6 billion in loans to Kirch as part of a rescue plan to save EM.TV from bankruptcy in 2001. The deal left Kirch in control of Formula One, but also dangerously in debt, contributing to its insolvency last year.
EM.TV has an option for a percentage of future proceeds from a sale of the stake. The pact is expected to settle a dispute with Formula One automakers, who have threatened to found their own racing event unless they get a bigger piece of Formula One profits.
EM.TV was forced to write down the stake’s book value of $220 million last year, leaving it with an annual loss of nearly $340 million.