MARCH 19, 2002
Banks meet to discuss Kirch
THE major creditors of the Kirch organization meet today to decide what to do with the ailing German media company, which controls the commercial rights to the Formula 1 World Championship. If the banks refuse to lend Kirch more money it looks likely that the company will be declared insolvent. The banks are not likely to extend more credit to Kirch unless the loans are secured.
Rumors circulating in German financial circles say that bankruptcy is now inevitable and that will mean that the Formula 1 rights could be caught up in the debacle as assets of the company. This could mean that the company's majority shareholding in the Formula One group of companies will be sold on to someone else - if a buyer can be found. Alternatively, Formula 1 could turn its back on Kirch. The FIA has the right to terminate the commercial deal if it does not like what is happening with the commercial rights holder and it is possible that a completely new deal could be struck between the various parties involved. This is all speculation until the future of Kirch is known for certain.
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