Carmakers Wait for Formula One Offer by Banks

Carmakers are waiting for an offer by creditor banks of indebted German media group Kirch to take over the company's stake in the Formula One motor racing business, a DaimlerChrysler manager said.

"The initiative is with the banks," Juergen Hubbert, head of DaimlerChrysler's car division Mercedes, told reporters in Lyon late on Tuesday.

After Kirch took a majority stake in Formula One holding company SLEC last year carmakers said they would go it alone and launch their own championship when contracts expire in 2008.

Hubbert said taking a stake in SLEC would only make sense for the carmakers if their demands are met to guarantee broadcasting on free-to-air television and granting carmakers a say about the number and the venues of races.

Talks about the future of Kirch's 58 percent stake in the racing car circuit would include Formula One supremo Bernie Ecclestone, who still owns a 25 percent stake in the business he founded, Hubbert said.

Kirch bought its Formula One stake from German film rights firm EM.TV for $1.6 billion, financed by loans from part state-owned bank BayernLB, and U.S. investment banks Lehman Brothers and J.P. Morgan Chase.

Kirch's Formula One stake is held by investment vehicle KirchBeteiligung, tottering on the brink of insolvency in one of Germany's biggest corporate failures since World War Two.

KirchMedia, the company's core rights and broadcasting unit, has already filed for insolvency as efforts continue to restructure the business. Kirch pledged its own Formula One stake and the remaining 17 percent still owned by EM.TV as a collateral to the banks.