Last two Kirch companies file for insolvency

The Kirch media empire was finally laid to rest yesterday at a regional court in Munich when Taurus Holding and Kirch Beteiligung were granted insolvency protection from creditors.
The collapse of Taurus Holding, the umbrella holding company of the Kirch media group, heralds the end of Germany's second largest conglomerate, behind Bertelsmann, and is epilogue to one of the largest corporate failures seen in Germany.
The implications of the collapse are enormous, with BSkyB, which held a 22% equity interest in KirchPayTV (part of Taurus Holding) conceding that it probably see no return to its €1.7 billion stake following yesterday's filing.
Originally, BSkyB exercised their put option on May 22 to transfer the stake to Taurus Holding – two weeks after KirchPayTV filed for insolvency. In a statement, BSkyB said: "The Group noted that unless the then liquidity issues of Taurus Holding were adequately resolved, the Group believed that it was unlikely to receive a significant amount, if any, as a result of its put option."
BSkyB had already written down the investment "to nil" during the last interim report.
Meanwhile, bound up in the Kirch proceedings is the fate of Europe's biggest publisher, Axel Springer Verlag – of which Kirch Beteiligung held a 40% stake. Worse still for Leo Kirch, the rights for the Formula One championship are also up for grabs – again held by Kirch Beteiligung.
The Kirch empire spiral towards bankruptcy gathered apace over the past four months as it struggled to retain liquidity under the strain of €6.5 billion debts. There is now a question mark over the future of the Leo Kirch Foundation which owns a 73% stake in Taurus Holdings.
Michael Jaffé, already appointed to oversee the insolvency of Kirch Media, will administrate the insolvency of Kirch Beteiligung. Kurt Bruder was named as administrator of Taurus Holding.
Commerzbank AG, WAZ Mediengruppe and Columbia TriStar, a consortium lining up to buy out Kirch Media have confirmed that they will renew their bid for the company. Kirch Media currently holds the core film rights library and a majority 52.2% stake in Europe's largest free-to-air broadcaster ProSiebenSat 1.
However, Commerzbank AG, which is owed €360 million by the Kirch group – and which was believed to have held a 40% stake of the buy-out proposal – will reduce their interest to 25% in the medium term. A WAZ spokesman said that the proposal is not dependent on Commerzbank and WAZ will proceed accordingly.
UBS Warburg, brought in to oversee the sale of Kirch Media, has reportedly recorded the interest of over 80 companies so far. A spokesman for Television Francaise 1 SA, the French broadcaster, said the company is also considering a rival bid into procuring assets of Taurus Holding, but would not specify which.
KirchGruppe, www.kirchgruppe.de
(GMcG)