German media giant, Kirch Group, is reportedly facing a financial crisis if the Dresdner Bank calls in a loan repayment, as expected, of around E500 million.
The deadline for the loan is officially the end of this year, although credit is often extended. However, the reports suggest that Dresdner will not be allowing an extension and that other banks to which Kirch owes repayments are expected to call in their cash early next year.
It is thought that Kirch’s total debt amounts to more than E5 billion. Analysts believe that Kirch will struggle to meet the deadline for payment of the Dresdner loan.
The group is also lumbered with an obligation to acquire an 11.4% stake in ProSiebenSAT1 from Axel Springer. This ‘put option’ is expected to exercised by Axel Springer in January, costing Kirch around E750 million and increasing financial pressure on the group.
