LONDON (Brand Republic) – German media giant Kirch Group has paid £550m in a bid to rescue debt-ridden EM.TV, the German company that owns 50% of Formula 1 racing.
The deal means Kirch will pay £382m for half of EM.TV’s 50% stake in SLEC, the Formula 1 holding company run by F1 racing promoter Bernie Ecclestone. Ecclestone owns the remaining 50% of F1 and Kirch now owns 25% of F1 racing.
Kirch has also taken a 16.7% stake in EM.TV and will increase its voting rights by 8% to 25% in exchange for its share in the two companies’ joint venture children’s and family entertainment programme library.
The deal comes as EM.TV yesterday revealed third quarter losses of £5m. This was coupled with a warning that full-year profits were expected to total only £15.6m, compared with the forecast £163.8m.
EM.TV said that the Jim Henson Company, creator of the Muppet Show, which it bought in April, made losses of £12.6m in the six months from April 1. Formula 1 made a profit of £88.5m in the first nine months of the current year.